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Methods of Finding a Business To Buy

Word of Mouth

This method of finding the perfect business to buy is very much chance-based and consists of someone telling you about, or you driving around and seeing, a business that is for sale. Due to its nature, you are exposed to a very limited number of businesses. And unless you are very lucky that one of the few discovered in this fashion is exactly what you want, this method is not very effective at finding the perfect business to buy.

Classified ads in the local newspaper

The old-fashioned method of finding a business to buy is to look in the classified ads in the local newspaper and see if any catch your eye. This is a very difficult way to find a business to buy for several reasons. One, the number of businesses-for-sale listed in the classifieds is very small compared to the overall universe of businesses that are for sale at any time. Two, classified ads typically present you with only three lines of cryptic text to give you background on the business. And three, classifieds do not have a search function so you have to spend a lot of time looking through all of the classifieds to find those businesses that interest you. While classifieds can serve a purpose in buying a business, they are not very efficient or effective.

Business Brokers

Business brokers are typically very professional and knowledgeable in the art of buying and selling a business. Plus they are skilled at helping sellers sell their business. But therein lies the rub – they are contractually obligated to help the seller sell the business. They are not obligated to you as the buyer. Therefore, brokers will usually look out for the seller’s best interests first, which means they will often only show you businesses that they represent. This severely limits your exposure to the number of businesses that are available for sale at any one time, which makes it an inefficient method of finding the perfect business to buy.

However, more common these days are Buyer Brokers. These business brokers represent you, the buyer, in your efforts to buy a business. This can be very effective because the broker knows how to navigate the process of buying a business. However, you often have to personally pay the broker to help you buy a business, which increases your costs. Therefore, it is often best to conduct a search for a business on your own, and then hire an attorney or experienced broker to guide you through the purchase process. But where do you search for businesses on your own?

Online marketplaces

Online marketplaces typically contain an exhaustive list of businesses that are for sale. Plus, it is easy to search these thousands of businesses instantly to find only the ones that meet your criteria. This makes online marketplaces the most effective, efficient and comprehensive method of finding the perfect business to buy.
There are many online marketplaces to choose from, but they are far from equal. Some have inadequate search functions, others are just interested in collecting listing fees from business sellers, and others do not offer the buyer tools to help make your search process easier. As a result, selecting a good business-for-sale marketplace is critical in your search for finding the perfect business to buy.

 

How to Find Qualified Buyers

Some people say the quantity of buyers that are interested in buying your business is most important. Others say the quality of buyers is most important, regardless of quantity. But the correct answer is both are very important. Here’s why:

If you have 50 buyers interested in your business, then you have plenty of quantity. But if you are selling a $1,000,000 manufacturing business and these buyers can only afford a business that costs less than $300,000, or if they all prefer a service business, then this “quantity” of buyers is a waste of time. You will spend hours talking to unqualified buyers about your business when they have no interest in actually buying it.

Conversely, say you only have 2 buyers interested in your business and they are looking to spend at least $1,000,000 on a manufacturing business. You have good buyer “quality” but not enough quantity. On average, you need at least 10 or more qualified buyers to look at your business before you can reasonably expect to sell it. And the more buyers you have looking at your business, the higher the sales price typically is.

In a nutshell, the more qualified buyers you have looking at your business, the faster you will sell your business and the more money you will make on the sale. But how do you get both quantity and quality of buyers interested in your business? The key is to employ several methods of effective advertising that don’t cost you a fortune.

Word of Mouth Advertising

This method of advertising is very spotty and should not be considered a core form of advertising. Due to its nature, your business is exposed to a very limited number of buyers that probably aren’t qualified. As a result, this method of advertising provides neither quantity nor quality, which makes it very ineffective at helping you sell your business.

Classified ads in the local newspaper

The old-fashioned method of advertising a business for sale was to place a classified ad in one or more newspapers and hope enough qualified buyers would stumble upon it. This method is not very effective because you only have a few short lines of text to tell your entire story and attract interest in your business. This not only reduces the overall quantity of buyers, but you also end up wasting time on a lot of unqualified buyers. As a result, classifieds are not very effective at generating a high quality or quantity of buyers.

Business Brokers

Business brokers are typically very professional and knowledgeable in the art of buying and selling a business. Plus they are skilled at helping sellers sell their business. They will prepare your business for sale and handle all discussions with buyers on your behalf.

In addition, brokers will help generate interest in your business from buyers through their relationships with other brokers, as well as listing your business for sale on their website.

However, to get maximum quality and quantity of buyers interested in your business it is best to complement a broker’s services with additional advertising efforts. You can do this either in conjunction with the broker’s efforts, or on your own.

Online marketplaces

Currently the most effective method of getting both the highest quantity and quality of buyers interested in your business is by advertising on an online business-for-sale marketplace. These marketplaces are searched by hundreds of thousands of buyers each month, and can generate a staggering amount of interest in your business.

There are many online marketplaces to choose from, but they are far from equal. Some have inadequate search functions, which mean your quality of buyers will decrease. The better the search functions the site offers, the more precisely buyers can search for what they want. And when a buyer finds your business, you know they are highly qualified.

Other business-for-sale marketplaces are just interested in collecting listing fees from you, regardless of whether or not they help you find a buyer. These sites charge a monthly listing fee that is not tied to performance of any kind. As a result, they may or may not bring you any qualified buyers, and they really don’t have any incentive to do so.

The most effective business-for-sale marketplaces put their money where their mouth is and only charge sellers on a pay-for-performance basis. With these sites, you list your business for sale on the site and it appears in buyers’ search results when they search for a business that meets your criteria. But you are only charged a small fee if the buyer actually clicks on your listing and views its details. And you can set your own budget to determine the quantity of buyers you want.

 

Tips to Maximize Your Profit

In order to maximize your profit, it is important to make sure that your customers feel like they are getting something great. When customers feel like they are getting more value for their buck, then, eight times out of ten, people are more likely to buy your product. It is important to learn to build value. By building value, we mean looking at our product, the place where we sell the product and the person doing the selling. If you can get these things in alignment, then you will be able to maximize your product and make a grand profit.

Your product is one of the most important parts of the retail sale. For this reason, it is extremely important to know your product inside and out. Search for obscure details about your product that customers might not be aware of. Make sure you use what you know about the products features to draw in your customer. It is important to make sure that you use wording around your customer that will make them think that they cannot live without your product. For example, you want to use a phrase like ‘what this means to you is…’ or ‘this product will help you…’. Always make it see like it is a product that they have been searching for and now they have finally found it. When a product has a barrage of features, you want to make sure to keep to a minimum when talking the features. If you talk about too many features your customers will become overloaded with information and this can cause them to think negatively about the features. Above all, remember to learn as much as you can about your product, to the point that you are an expert.

When looking at the place where you sell your product, you want to make sure that your establishment is a one of a kind place. You don’t want to look like all of the other businesses out there selling the same things. You want it to draw in the consumer either by carrying a product that everyone wants or needs or by the way that you present the products on your store fixtures. You want to make sure that you have enough inventories for your client base. You definitely do not want to run out of stock and then have to turn someone away or special order something, because that will probably send the message to your customer that this is not a place to do business with again. Make your establishment a place that is welcoming to every consumer out there.

The most important place to build and increase value in your business is by looking at yourself. You are the one thing that is unique to your business. Your consumer can not get you anywhere else but at your establishment. When you are patient and well informed about the product, the customer will think that you are willing to go the extra mile for them. This will go a long way towards setting you apart from your competition. Usually, a customer is forming an opinion on you within the first minute to minute and a half. So make sure you greet the customer warmly and enthusiastically so that they will want to do business with you. Make sure that if you have employees that they adapt the same mentality. Think about it, you definitely do want your customer’s first impression being a non-smiling, upset, or angry teen. Along the same lines, you also want to make sure that whoever you hire to help you out has experience with the product as well. They need to know just as much as you do about the product so that they can better relay the information to your customers. If you are having a bad day or are dealing with a tough customer, take a quick attitude break and breathe deeply. It has always been my rule to ‘Kill them with Kindness’. This makes people think that they are completely special. Ask for referrals as your happy customers are your best salespeople. Let their great experience be a story that they tell other people about.

 

Tips to Develop your Business

As I said before it needs to start with passion for the product. Starbucks was started by people with a love for good premium coffee. Microsoft was started by nerds who liked to play with computers. Often an unusual hobby can turn itself into a business. People who love to fish can open a bait shop. The possibilities are endless, but you think there are big box stores out there that will crush your dream. That can be true unless you can offer something unique. Often with small businesses the biggest differences are knowledge of the products and customer service. These things can make or break a small business.

Where to Locate

Location, location, location, it can’t be said enough. There are locations that a business is destined to fail and it doesn’t matter how good the product is, if no one is willing travel to you. The best place to start is in a district with like businesses or complimentary businesses. If you own a fabric store, the best place could be next to a sewing machine store. You should be aware of parking and the different city variances where you want to locate. You don’t want a place that will not allow trucks to be loaded or unloaded if you have large products.

Size of the Building

The size of the building you have your business in is important. You don’t want one that is too small because it will look cluttered and messy. But if you have one that is too big you will be paying for space you’re not using and it will look like you don’t have the funds to stock your store. There are times when building yourself is the best option especially if your business requires some unique features. For example, if you are manufacturing heavy items and need over cranes to move things it would be better to build to suit your needs than to try to refurbish an existing building.

Sales Tips for Small Business Owner

# People buy based on emotion more often than reason. They purchase what they want, not necessarily what they need. First impressions are crucial, so your initial approach must establish a professional image. You have 5 seconds.

# People will buy from someone they trust. Your credibility must be evident, and how you open after those critical first 5 seconds will often determine your success. Do not try a hard sell up front. Avoid talking about the weather, current events, or the latest joke. It is time to listen. A brief introduction is usually enough which gives the prospect a chance to explain their business and situation.

# People are not looking just at you. What you have, what it does, and how it will help doesn’t matter until you understand fully what they want. If you start out with an open ended question, you show respect for the buyer’s time, and a willingness to listen. Any question that may be answered “yes” or “no” won’t work. Open ended means you begin by asking or stating something like “Please take a moment to explain your business and a few details about what you need.”

# People will open up if given a chance. Do not dominate the conversation until you understand what they want. Be prepared to paraphrase what you hear, and then offer your solution. Your message needs to be direct and to the point to establish the benefits of what you offer. Anything that you can do to create a mental image of your solution and the benefits to the customer shows you care more about them than the sale.

# People are usually sold before you ask for the order. Many are presold in those first 5 seconds explained in Tip #1. If you listen first, restate what they have said, and then explain your solution in terms of the benefits, it’s time to ask for the order. A small business owner may not be comfortable here. My advice is simply state “I want to do business with you. From what I have learned, I’m ready to help, so let’s get started today.”

# People will forgive mistakes if you remain honest. Establish trust, and openly admit errors if mistakes are made, and your customers are more likely to remain loyal. Have a plan when things go wrong. React quickly and state what happened, what you are doing to resolve any problems, and how long it will take. How you handle mistakes will be remembered by your customers a lot longer than what went wrong.

# People will not forgive a dishonest salesperson. A sale is not about tricking someone into something they don’t want or need. This is an important and tough rule: Be prepared to refuse an order if you realize your solution just won’t work. In any sales situation if you perceive an opportunity to sell, but doubt the results of your product or service, consider your long term reputation. Credibility lost is nearly impossible to regain, so give your customers the truth up front.