Questions Business Owners Ask Me and the Answers I Give Them

Throughout my years of successfully assisting business owners in selling their companies, I've been asked the same questions by many potential sellers. In this article I have compiled a list of common questions about selling a business along with my answers that you may find helpful.

1. How much is my business worth?

The correct answer is the price a Buyer offers you that you are willing to accept. It makes no difference...

We Sell Businesses

We need to keep reminding ourselves of this in the present turbulent times. As with many other businesses, the last 4 years have been tough for us – a battle to maintain sales and profits. We have reviewed our processes and systems, trimmed expenses (but you cannot cut your way to success) and focussed on our team and on the relationships we have built up over 50 years.

But we always get back to the basics – ours is a simple business...

“Happiness”

There has been a lot written, and a lot of research, on happiness in recent times. There is general agreement on the ingredients contributing to happiness. We believe owning your own business ticks all the boxes.

Positive emotions – having enough to live a comfortable lifestyle, educate the kids, and buy what you want (within reason). The latest findings suggest that money does buy happiness.

Engagement – being involved in what you are doing, enjoying your job.

Meaning – not necessarily changing the world, but...

Asking Price versus Selling Price

In preparing for a talk in Florida next month, I found a very interesting statistic. I have kept some data from my days at United Business Investments (UBI). As a few of you know, UBI was the first business brokerage firm to have some 50 company-owned offices in eight states. I had someone who kept pretty accurate statistics of the offices’ performance: number of listings, number of deals, sales, etc.

One of the more interesting statistics was the actual selling price versus the seller’s asking price. In 1978, it was...

Advice from Veteran Brokers (Part 3 of 3)

“The following question was asked some years ago of quite a few successful business brokers – here are their responses. They were originally published in The Business Broker when it was a print publication. Subsequently, it was included in Wit & Wisdom of Business Brokerage edited by Connie Womack, an well-known industry veteran, now retired. The book is published by Business Brokerage Press (BBP). For information visit BBP online.

Have at least six months of working capital saved for the initial dry spell. Keep your overhead low.

Go to work for a successful business brokerage company to learn from the experts.

Have the discipline to...

Advice from Veteran Brokers (Part 2 of 3)

“The following question was asked some years ago of quite a few successful business brokers – here are their responses. They were originally published in The Business Broker when it was a print publication. Subsequently, it was included in Wit & Wisdom of Business Brokerage edited by Connie Womack, an well-known industry veteran, now retired. The book is published by Business Brokerage Press (BBP). For information visit BBP online.

Don’t quit – be tenacious – hard work – high energy and a sense of humor will see you through to success.

Look at the business as a profession, not just a way to make money. Look at the profession for...

Advice from Veteran Brokers (Part 1 of 3)

“The following question was asked some years ago of quite a few successful business brokers – here are their responses. They were originally published in The Business Broker when it was a print publication. Subsequently, it was included in Wit & Wisdom of Business Brokerage edited by Connie Womack, an well-known industry veteran, now retired. The book is published by Business Brokerage Press (BBP). For information visit BBP online.

If you were to give one bit of advice to someone entering business brokerage, what would you tell them?

Be committed!

Business brokerage is a classic example of a business that is customer-service intensive, if it is to be a successful rewarding activity. New entrants should be...

What Sells?

The following search breakdown by type of business in order of interest (restaurants being first) is based on almost 850,000 searches – only the top 16 are listed. Courtesy: BizBuySell

1. Restaurants
2. Gas Stations
3. Convenience Stores
4. Liquor Stores
5. Bars/Taverns
6. Drycleaning/Laundries

How Long Will It Take to Sell My Business?

The more things change, the more they stay the same.

When I first sold businesses 50 years ago sales agreement forms were only 2 pages long, IBM golf ball typewriters had been introduced the year before, commission rates were 2%, and supermarkets and shopping centres were in their infancy.

No internet. No cellphones. No faxes. No emails. No photocopiers. No PCs.

But we... 

Email Interview of WM B Martin by Tom West (Part 3 of 3)

Today's posting completes the three-part interview of industry veteran WM B Martin by BBP's Tom West. It picks up after Bill's second "retirement" and includes what Bill considers to be the secret of his success.

Tom:
But, there’s more to the story.

Bill:
Yes, when ABMI in Kansas City (the brokerage I’d started in 1989 and sold in 1998) found out I was no longer involved in other enterprises, they asked if I’d consider moving back to KC, and taking on a short term consulting contract, to advise them on returning ABMI to the “basics” we’d pioneered at ABMI, that they’d gotten away from. We worked out the details, and from 5-1-10 through 10-1-11, I consulted with ABMI. We were able to re-introduce the “basics” over that time, including recruiting and training managers to continue ABMI’s progress.

Tom:
So, what have you been doing since Oct 2011?

Email Interview of WM B Martin by Tom West (Part 2 of 3)

Today's posting continues an interview between BBP's Tom West and industry veteran WM B Martin.

Tom:
Then, you “un-retired”.

Bill:
Yes, Tom, I simply wasn’t ready to stop making deals. So, in late 1999, I bought back from ABMI the Springfield, Mo branch office I’d sold them, moved to the Ozarks, and took possession of that one agent, 10 listing office, planning to just “tinker” with business brokerage part time, and enjoy the wonderful Southern Missouri lifestyle.

Tom:
That “part time” plan didn’t last long.

Bill:
Right. We started doing the things in Springfield that had worked so well in KC, and the Springfield brokerage (now called First National Business Brokerage Corp) “took off” like a sky rocket. Within a year we had... 

Email Interview of WM B Martin by Tom West (Part 1 of 3)

This week's postings comprise a three-part interview of Industry Veteran WM B Martin by BBP's Tom West.

Tom:
Bill, you and I, with over 30 years in business brokerage, have done some fascinating things in our industry, and I think my readers would be interested in hearing the history of your experiences. 

Bill:
Thank you, Tom, for your interest in my activities. I joined Business Concepts, Inc in Kansas City, Mo (which was, back then, the most successful business brokerage in KC) in 1982, as a new, straight commission agent. BCI was a former VR agency (they went independent the year before I joined them), but they still used the original VR/Tom West agent training materials. So, Tom, like thousands of others in our business, I’m a Tom West trainee, even though I didn’t meet you in person until many years later, at an IBBA conference.

I fell in love with business brokerage those first weeks on the job, even though I was uncomfortable with...

A Look In The Mirror

As year-end approaches, I find it beneficial to take a closer look at my performance, and where I might need some fine tuning. I will share my diagnostic review questions with you and perhaps you may wish to take a closer look at your own past performance. After you pinpoint your area of concern, you might find that a “DO BETTER” pill is called for.

Specialization is Here

We recently received a full-color attractive 3 by 5 inch postcard from a Century 21 Realtor. Under his name was the tag line "Active Adult Community Specialist." The card was of interest for two reasons: One, we happen to live in an active adult community but, more importantly, we were intrigued that a Realtor claimed to specialize in a particular real estate segment.

As many of you know, we edit and publish the annual Business Reference Guide. In order to get a lot of our information, we solicit business intermediaries who specialize in various different types of businesses or have experience with them. There are more industry specialists every year.

Valuation, Top Killers & Reasons to Sell

Comment from Tom West:

Following is an advertising piece used by travel expert Bob Sweeney president of Innovative Travel Acquisitions, in Atlanta, Georgia. It is valuable information on the very practical side of business valuation and deal making in general. Too many business brokers forget why the seller hired them in the first place – to sell their business. Business brokers are duty-bound to try to get the seller – theirs client – the highest price possible. Thanks to Bob for allowing us to use this piece.

Who Are The Business Buyers and What Are They Looking For? (Part 2 of 2)

Comment from Tom West

Two comments on the information in yesterday's posting. First, some additional information on what businesses are in demand in today’s market. In addition to the top 20 posted yesterday, here is the October 2011 list of businesses that buyers searched for on businessesforsale.com, a leading site for businesses listed for sale.

1. Nightclubs
2. Miscellaneous Restaurants
3. Bars
4. E-Commerce Businesses
5. Websites

Tom's Rules for Success

I recently saw a query from a business broker on one of the various web sites asking what his office could do to create income on a regular basis until the deals started flowing. I assumed form the question that it was not a start-up office, but one where the deal flow was more than slow.

I don’t have the answer to this query, but I always get concerned when business brokers stray from what they do best – listing and selling businesses.

Valuation Reports?

I have no issue with brokers providing valuation reports for business owners. However, I would be concerned if the opinion of value (a better term for what most business brokers supply) is created for legal or IRS situations. The brokers are then entering dangerous ground. In those situations, a broker is better off recommending one of the various third party valuation services available.

FF&E Valuations?

I’m also comfortable with business brokers providing opinions of value for business fixtures and equipment. These opinions of value services go hand-in-hand with listing and selling businesses. I am concerned, however, when... 

Saying "NO"……

 We say "no" to many potential listings. This month starts my 50th year selling businesses. We have sold around 7,000 businesses in that time, earned "enough" money, and, more importantly, made a lot of friends and built strong relationships with many professional advisors.

Fundamental to our growth has been our commitment to truth and honesty in all our dealings with clients and customers and our belief in the "golden rule" – do unto others as you would have them do unto you.

One aspect of this is providing...

“Cap X” For Business Brokers

From my perspective, each of us sells businesses all the time (I hope), and with our sellers and buyers we frequently discuss the “Cap X” (annual capital expenditures), the monies our buyers need to invest in the business annually to keep the business running and growing. Each of us, as business brokers/intermediaries, have our own business, with about 50% of us working in multi-intermediary offices, and about 50% being sole practitioners. But in almost every case, each of us “are our business” since most of us are almost wholly commission based, so our success is created by ourselves, and directly effects our income. Just because our profession has a very small barrier to entry is no reason to think that each of us, as independent businesses, do not have an annual “Cap X.” However, in our professions case, most of our “cap x” is in intangible assets, not tangible assets. Nevertheless, those expenditures are necessary to keep our businesses growing. What are some of the key expenditures for us? I suggest that two primary items are Marketing (in multiple manners) and Education. And, in our case, most of the education comes from our associations, and obviously within our particular association, association membership is directly tied to education and vice versa.

Few things in my career as a business broker have had the financial impact that

MOTIVATED SELLERS, what makes them motivated?

You see this term on many business listings online or hear it from listing brokers all the time. Have you ever wondered what makes a seller a "Motivated Seller?"

There are several reasons that a Business Seller would be considered a "Motivated Seller." Generally they all have a sudden important "motivator" such as a serious personal or family health issue, or they are planning on moving out of the geographic area for reasons beyond their control. Perhaps they are just really burnt out and want to get out of the business. These are only a few of the possible reasons for a seller to be especially motivated.

Whatever the reason, the "Motivated Seller" is usually spurred on by a need to sell as quickly as possible.

Co-Brokering – Why Not?

DISCLAIMER: Please note that this is one subject that really gets under my skin. As a result, the following may step on some toes, may get under your skin, and hopefully will encourage the one thing that can help you make more money! 

On our most recent survey – available now – 52 percent of respondents said that co-brokered deals represented only 15 percent or less of their deals. Actually, 38 percent reported that co-brokered deals represented less than 5 percent of their deals.

When asked why they didn’t co-broke, the most frequent response was “no need” followed by “confidentiality,” “legal concerns,” unsuccessful in the past,” “incompetent brokers,” and “trust/control issues.” Over the years, we have received the same responses in almost the same order.

#1: “No Need”?!? 

We Sell SME’s

Our focus is on selling SME (Small and Mediumsized Enterprises) – and over 80% of our sales are in the $10,000 to $500,000 price range. We tend to peak out at $5 million.

We like SMEs because they are generally owner-operated businesses and we understand them. There are a lot of them out there. 98% of New Zealand businesses are SME. They are different.

SMEs have different value drivers than large companies. They provide employment to their owners (and possibly family too), independence, security, challenge, and lifestyle – as well as the opportunity to earn good profits and future capital gains.

SMEs are important to New Zealand’s economy – they are the engines of national economic growth and job creation. All big businesses start small and we have seen some wonderful success stories with buyers of SMEs becoming millionaires.

Tom’s Business Brokerage Rules of Thumb

Here are some rules of thumb on business brokerage covering a lot of different areas. Over the years I have found that there is a lot more truth in them than one might think. They are in no particular order. I can’t claim to be the originator of them all, so I must give credit to a lot of my colleagues over the years.

The following rules are tried and true.

“The first offer is almost always the best one!”

“The reason for sale a seller initially provides is very seldom the real one.”

“The real selling price is half-way between what the seller thinks it’s worth and what the buyer thinks it is.”

“When the seller’s attorney insists on holding the buyers deposit...

Top 10 Exit Planning Mistakes

1. Bad timing – judging the best time to sell is important to maximise the price received, e.g. when the business is doing well or when there is strong demand as there is at present.

2. Being reactive – waiting for the perfect deal is like waiting to win Lotto – it is highly unlikely. Better to be pro-active when the time comes and have the business marketed professionally.

3. Not considering all your options – a sale to staff? A sale to a competitor who has synergies? Bring in a junior partner so you ease out?

4. Being distracted – do what you do best – run the company. Let the professionals market your business and negotiate the best deal.

5. Not knowing your value – what is your business worth now? Have you realistic expectations and will that provide enough for your next project?

Serious About Success (Part 2 of 2)

YOUR OWN PERSONAL TIME BANK

Think of the 24 hours all of us have each day as a TIME “BANK”. And, if you “borrow” any hours from PRIME TIME for activities better suited for FLEX TIME, you need to “pay back your TIME BANK”.

In other words, if you play golf for 8 hours on Tuesday, you should “self manage” and promise yourself that you will devote 8 FLEX TIME hours to marketing, to pay back the 8 PRIME TIME hours you borrowed. Better yet, play golf after 5pm. You absolutely can get in 9 holes (or more), easily, before dark, after 5pm, in the summer time (playing 9 holes, each of 2 weekdays after 5 pm, still gives you 18 holes, right?). So, (if you owed yourself 8 Prime Time hours you “borrowed”), you could devote 1 ½ hours per night, for a week, to phoning buyers you couldn’t reach during the day (a brilliant idea, anyway, as many buyers can’t be easily reached during the day, anyway). Or, you could devote 2 Saturdays, of 4 hours each, to “blitz”...

Serious About Success (Part 1 of 2)

The following are opinions. But, they are based on almost 30 years experience in listing and selling businesses, and, during that time, training literally hundreds of agents in offices nationwide, then being able to observe the practices of the successful, and the not so successful, agents. These are a few of the reliable “truths” I’ve observed, along with my theory about “Prime Time” and “Flex Time”.

PRIME TIME

This is Monday through Friday, 9am to 5pm. These are the days and hours most buyers, sellers, bankers, lawyers, accountants and landlords are easiest to make appointments with. This represents 40 hours per week, 172 hours per month (with 5 days times 4.3 weeks average per month), and about 2,054 hours per year, of PRIME TIME, available to each of us.

FLEX TIME

Weekends anytime, and weekdays after 5pm and before 9am. Some of these hours, also, are times when you can

Broker Guidelines (Part 2 of 2)

The following broker guidelines come from the second half of a memo Bill Martin recently emailed to the 22 agents that work at American Business Masters, Inc (ABMI), a Kansas City business brokerage firm. Due to the length of the memo, we posted the first five yesterday and the remaining five below.

Each Main Street agent should work to make the following a reality:

(1) through (5) listed in yesterday's posting.

(6) Listing pricings/evaluations are generated by (a) your working the telemarketing seller leads ABMI provides ample quantities of (generated by ABMI’s on staff telemarketing opeators), and your contacting 100% of those, setting appointments to do pricings/evaluations, or to “get acquainted”, and/or (b) by your contacting the ample quantities of “reassigned” seller leads ABMI provides you (aged leads that are still suspects), and your contacting 100% of those, and/or (c) your developing your own seller leads through personal production, and/or (d) you canvassing business owners, either in person, or by phone, and/or (e) you sending direct mail or emails to business owners.

(7) Each Main Street agent should be spending at least

Broker Guidelines (Part 1 of 2)

The following broker guidelines come from a memo Bill Martin recently emailed to the 22 agents that work at American Business Masters, Inc (ABMI), a Kansas City business brokerage firm. Due to the length of the memo, we are posting the first five guidelines today and the remaining five tomorrow.

 We’re doing great.

Over the last 12 months, during what was supposed to be a “recovering” economy, we have made sure ABMI is practicing, with even more energy, the “basics” we’ve learned over the last 30 years of listing and selling small businesses.

ABMI has become the “New ABMI”, with dramatically increased buyer lead flow, improved listing quality, a doubled agent sales force (now totaling 22 business brokers/agents, working the 10 counties of metro Kansas City), recruiting and training of an exceptional administrative staff, the development of state of the art internet marketing and improved advertising, the writing of a new agency web site (www.abmi.net), totaling hundreds of pages of new content that’s unique to our site, the development of an in house commercial real estate agency with an ultra talented managing real estate broker, the recruiting/development of talented sales management, and lots of agent training and re-training, resulting in sales and commission income that doubled in 2010 over 2009, and, in 2011, commission income that is headed for record setting by doubling again over 2010.  

Everyone at ABMI will benefit from these improvements. At least, everyone that does their part to be involved in taking advantage of the opportunities created by ABMI’s owners. Here are the guidelines that each Main Street agent should use as your personal goals, so you can generate your share of these exciting opportunities.

Each Main Street agent should work to make the following a reality:

(1) You should have no less than 10 personal listings/seller engagements at all times. If you are a new agent, or one that’s been on staff less than 6 months, you should...

Visual for Selling a Business

Contactme.com recently posted a visual summary on their blog covering some basics of selling a business. We thought it was an interesting way of presenting the information. It included the costs, benefits and steps of selling a business.

Of course, we can't help but comment on something you've heard us say over and over. While sellers are fond of the idea of receiving all the cash up front in the sale of their business (a possibility listed in the first benefit of the contactme.com visual), it is the job of business brokers to remind sellers of the benefits of offering seller financing. These benefits include increased sales price, additional funds received over time in interest, and even an increased chance of selling the business in today's climate of scarce business financing.

Business Broker vs. M&A Intermediary

The following is taken from the preface of Selling Middle Market Businesses: Guide Book for intermediaries by Russell Robb.

There is a movement afoot whereby business brokers are moving up-market from selling Main Street businesses to selling companies in the lower-end of the middle market, previously the exclusive domain of the M&A intermediary.  There is no precise definition of lower-end of the middle market as some people would clarify companies with sales between $5 to $100 million, while others would classify this category as companies with sales between $3 to $50 million.
 
There is a natural tendency for business brokers selling Main Street companies to...

Old Pro and the Cold-Canvas Call

The Old Pro had just returned from his vacation. He was suntanned and ready to go. The summer was over, and it was time to get back to work; so we had invited him into the office to talk to some brand new people we had just recruited.

We had not even finished introducing the Old Pro, when he began, “Selling businesses is tough work, but for those who are willing to pay their dues, it can be very rewarding. There are no short cuts to success, especially in the beginning. Your manager is going to make you learn the hard way —I know, because I trained him.

“He’s going to tell you to go out and talk to the small-business owner. This may not sound like it’s the easiest or most efficient way to get listings,—and maybe it isn’t—but there’s a method to all this. Small-business people...

C-Store vs. Quick Serve Restaurant

We found the following of interest to anyone selling C-Stores. The chart points out the growing popularity for convenience food.

“Reasons for choosing this c-store over other places for purchasing prepared food over even quick service restaurant. Note also that convenient location was very important over quick services establishments.

C-store vs. QSR off-premises, 2009 percent of traffic

Source: The NPD Group as seen in Nation’s Restaurant News, October 18, 2010. www.nrn.com

Introducing the “Old Pro”

For those of you unfamiliar with the “Old Pro,” he is the legendary G. R. “Russ” Wright, a man who introduced many to business brokerage, and whose own career spanned over 50 years. Occasionally, we will include an “Old Pro” story on the blog, often reminding readers of the tried and true basics of business brokerage. The following is from an article I wrote for the January 1987 issue of the Business Broker and offers an introduction to our “Old Pro”.

At the suggestion of a family friend, I moved to California in 1962. That family friend was our “Old Pro,” and subsequently became my mentor. Just before my arrival, three of Russ’s top salespeople had left to form their own business brokerage firm. I should point out that Russ had been in the business since 1935, so by 1962, he was indeed a pro! (I should also point out that Russ eventually became my father-in-law, but quite a few years elapsed before I married the boss’s daughter).

California was a licensed state, so while I was studying for my real estate examination...

Hot Business List -- April 2011

Below you will find the current “hot” business list courtesy of data from Businesses For Sale (www.businessesforsale.com). We asked Businesses For Sale for a monthly ranking of business types based on the number of “hits” on their site. This ranking is not based on the actual sale of businesses.

Top 10 Businesses:

1. E-Commerce Businesses
2. Convenience Stores
3. Miscellaneous Restaurants
4. Bars
5. American Restaurants

To Fee or Not to Fee

My staff and I have worked hard to reach the high levels of competency we have achieved. Between educational and vocational awards, designations and battlefield tested skills we have the scars and medals shared by many of our contemporaries in this occupation we share. Whether it’s practicing as brokers on main street, intermediaries in M&A, valuations for divorce, shareholder actions, estate matters, potential sale, etc., buy-side engagements or arranging financing so that our clients maximize their life dream, we all strive for excellency.

So why do so many in our industry perform for free, sans fee?

We charge potential clients an upfront fee for a strategic options valuation before being engaged to represent the sale of the company. We ask buyers to pay a retainer if they want us to represent them in a business search. We charge a fee to aid a buyer in securing financing and credit back to the buyer if we’re paid an origination fee by the lender.

Sure, it’s argued that we should work on a success fee basis like real estate brokers. They do a comparative market analysis for free and then hope they will get the listing and eventually get the property sold. Many business brokers/intermediaries do an evaluation for free with the hopes of getting the listing. Even if all we had to do was pull BizComps and Pratt’s Stats and present same in a 2-page report, chances are we’d still have 2 to 4 hours of work invested. I’m constantly amazed when I hear of a contemporary in another office working for free. Even if you do not have valuation credentials, are you not more qualified than most to offer an expert opinion of value?

Businesses Startup Rate at 15-Year High

Last year 565,000 new businesses were started every month. That’s 6,780,000 or over 6 and a half million for the year. Another way of looking at it is that every month in 2010, 340 of every 100,000 adults launched a business. And, apparently the numbers were about the same in 2009. Now, obviously the businesses launched weren’t all General Electric or Ford Motor Company. In fact, very few even had one employee. And, we all know that many of them folded in the first two years.

But, the good news for business brokers is that many of them will be successful and eventually be sold – for all of the various reasons known so well. There are many sole-owned and operated businesses; and many others that are just husband and wife owned and operated businesses. Many of these, however, end up to be quite successful. There is a market for them. The government complains that very few (too few, according to it) hire employees. Unfortunately, many small businesses delay, or just won’t expand to require employees because of the cost. By the time one adds all of the taxes and insurance (including health) to a reasonable salary – it just doesn’t make sense. What the government doesn’t figure on is that much of the work that an employee might contribute is being outsourced to another one-person operation. This obviously helps maintain small business. And, don’t forget, a home-based business does not pay rent and can deduct the office portion of the home.

Business brokers should take advantage of this huge increase in small business.

Participate in BBP's Industry Survey for 2010

Throughout the month of May, we are inviting all business brokers and intermediarys to complete our Industry Survey for calendar year 2010.  In appreciation for the time required to complete the survey, participants will receive free Industry Survey Results.

Survey results offer a glimpse of industry averages, changes and trends over time, as well as the general state of the industry. Obviously this "glimpse" is only as accurate as the data entered by those in the profession, so we do ask that participants take the time necessary to provide accurate information.  We so appreciate those who have completed our industry surveys in the past.

If you complete the survey by May 31st, we will make sure you receive a free copy of the results.

Begin the Survey Now

Old Fashioned Values

It is almost 50 years since I sold my first business – a Four Square Store in Otahuhu – and I have been involved in nearly 7,000 business sales since.

Some things don’t change:

• Our Code of Ethics is still the same: “do unto others as you would have them do unto you”.
• Be honest with business appraisals – tell owners what they need to know, not what they want to hear. We don’t “buy” listings.
• People answer our phones – not press #1 or “your call is important”. To us your call really is important.
• Still believe “a man’s word is his bond” (or a woman’s) – but it is prudent to get a signature today.
• Stick to our knitting – we sell and value businesses – not commercial buildings, farms or houses.
• Our fees will be low and be fair – up to 50% lower than some firms – yet providing outstanding marketing and personal service.
• We welcome immigrants – they enrich our country, financially and culturally.
• Integrity is non-negotiable – we will not tolerate any unethical conduct in our team.
• Technology is great (crunching numbers, handling databases, fast communication) but it hasn’t increased productivity and profitability despite our large investment in computers, programmes, etc. People sell businesses.
• We say “NO!” to listing and selling businesses we think are “dodgy”.

Call me “old-fashioned”, but my name is on the company and we plan to be in business for many more years.

Hot Business List -- March 2011

Below you will find the current “hot” business list courtesy of data from Businesses For Sale (www.businessesforsale.com). We asked Businesses For Sale for a monthly ranking of business types based on the number of “hits” on their site. This ranking is not based on the actual sale of businesses.

We are simply trying to provide a glimpse at what buyers are looking at now. We felt that displaying businesses sold would reflect the past rather than the future.

Of the top ten listed below, eight are food and drink type businesses. I include C-Stores as they do sell food and drink. Keep this in mind, that today’s buyer, perhaps more than ever, is a first time-buyer and wants something he or she is comfortable and familiar with. Interestingly, looking at data from many years ago, the top sellers look very familiar.

E-Commerce is also right up there. This category obviously includes a lot of different type of businesses. Since I believe that main street business brokerage is still a numbers business (and I don’t mean necessarily financial numbers). The more fast food businesses the office has listed, the more they have to show a prospecting buyer. Buyers who want something in the easy food line might buy a bagel shop, a sandwich shop or similar business.

Businessesforsale.com is an English company and very good site to place your listings with. But, they break down their lists by country. So, the lists below are based on activity in the U.S.

IBBA Questionnaire

by Tom West

A recent email from the International Business Brokers Association (IBBA) had a short questionnaire on why deals fell apart. The results were as follows:

My comments:

Unreasonable Seller Expectations
When I initially saw the first reason listed for why deals fell apart, I thought it was a misprint: Sellers had unreasonable expectations? In fact, I was so concerned that I went back to the email and sure enough it was seller expectations.