Peter  Siegel

Article Summary:

Find a business for sale using these secrets.

How To Find A Business For Sale

Most buyers don't realize that only 20% of all business buyers are successful in buying a small business. As a consultant I talk to buyers on the phone daily and the frustrations I hear from them are usually pretty much the same.

Buyers need to know how the game works when buying a small to mid-sized business. It is a lot like finding that great job - it takes a lot of work and patience.  Most business buyers are unprepared, unrealistic, and think they will EASILY find that perfect business. If you are thinking of buying a small business you need to carefully read and follow the points below to be successful.

To successfully buy a small to mid-sized business you need to:

1. Have a one page "Acquisition Criteria/Resume" ready at all times - this info consists of the types of businesses you are looking to purchase, what geographic areas you want to buy in, what amount you have for a down payment, how much adjusted net income you expect from the business you are buying i.e. return etc. Make sure you have your name, address, all phone numbers to be contacted at, email address, and fax number at the top - and get this out to all business brokers, owner/sellers, and agents you speak with.

2. You need to understand as a buyer that 70% of all business brokers and agents don't cooperate with each other on their listings - the reasons vary - but you need to know this when you go searching. Searching for a business to buy is not like looking for a house to purchase (or residential real estate). You need to contact many brokers and agents who may be selling the types of business you are looking for and send/fax/email them your "Acquisition Resume" and stay in touch with them on a consistent basis.

3. Remember that 30% of all small business listings for sale are "Pocket Listings" - businesses that are not officially listed with a broker & not advertised - but brokers and agents are always looking for buyers for them.  It's worth it for you to be on the list (or database) of as many business brokers and agents as possible with your search criteria (in writing).
 
4. Take confidentiality agreements seriously. If you are going in with someone else to buy a business (like a partner) make sure you both sign and get it back to the broker or owner immediately - don't expect much information about the business without signing one. Keep all info about businesses you look at confidential - you break the pact on one of these and business brokers will never show you another business (and there are legal ramifications in many instances)!

5. Never ever tell a business broker or agent these things: "Don't worry I have plenty of money for a down payment/to buy a business - it's none of your business", "I'll look at all businesses for sale and areas - I am not picky" - when brokers and agents hear these items and other nonsense from potential business buyers they know you're not a great prospect and will usually pass on you. It comes down to supply and demand. There are more buyers than sellers now in the marketplace and it only takes one buyer to buy a business. Be open, truthful, and communicative with business brokers, owner/sellers and agents - it will pay off.

6. Be prepared financially by getting pre-approved/reviewed for financing (SBA etc.) ASAP and make sure you have your down payment liquid and ready to go. Have all the forms completed ready to go - Personal Financial Statement, Management/Resume Form etc.  I can't tell you how many times I consult with buyers and how they were aced out of a deal since they weren't ready financially (i.e. they had to wait and pull the equity out of their home for the down payment, get their information together etc.)!

7. Go ahead and make offers on businesses that interest you! Pull the trigger! Buyers who hold back, never make up their minds on deals are the ones who never buy.  There are contingencies in purchase agreements that protect you. Making an offer on a business usually locks out other buyers while you can do your due diligence.

8. Select your team of advisors - CPA/Accountant for due diligence, attorney for assistance with contracts, financing sources, etc be ready with these professionals now so you don't kill time looking for them while the seller selects another buyer since you weren't ready to go!

Peter Siegel, MBA is a nationally known consultant and author - with over 25 years experience on the topic of selling, buying, and niche financing (the purchase of), small to mid-sized businesses. His latest book, "Businesses For Sale ? How To Buy Or Sell A Small Business" is available online and in bookstores. In 1994 he founded BizBen.com and later USABizMart.com ? two of the leading business for sale, business opportunity, & franchise for sale related websites, and he presently writes a syndicated small business blog at and produces a Podcast which focuses on issues, educational events, and information related to buying and selling small to mid-sized businesses.

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