There are many reasons one would want to buy an existing business like investing, starting over, or starting a new venture. Not everyone is a start-up entrepreneur with a great idea and drive to build. It’s perfectly fine to take something existing and make it your own. But how do you find businesses to buy that are ready to be bought and in good shape?
Contact an Investment Bank
Private Investment Banks can help you buy and sell a business. They will do most of the work for you in return of a small cut. However, they will also do most of the work and find you the best deals for your situation. Investment bankers have connections you wouldn’t be able to tap in to, which allows them to find unique opportunities in the niche you are looking for. They’ll negotiate the deal for you and walk you through the paper work.
Word of Mouth
This may not be you average approach but if you are in the market to buy a business, ideally you have done a lot of networking to get connected with and to potential business partners in the future. Take your connections ask around if there are any opportunities for you to buy a business, maybe even in steps. Sometimes business owners have lost passion for their business or want to move on to bigger and better things but have not invested the time or resources in to selling their business but will take an out when offered.
While cold calling is usually associated with sales, it can work in your favor when looking for businesses you can buy. Establish the niche market you want to be in i.e. tech, food, or even manufacturing. Decide where you want to live or if you want to stay local. Know the highest price you are willing to pay for a business. Start your research by looking at companies that meet your needs, check out their website and social channels, research any possible investors and if there are any debts associated with the company. When you have all the information you need, call the business to set up an appointment with the owner. State your business and what you have to propose in a friendly, non-aggressive way and suggest they think about it. Leave your card and ask to have lunch or dinner the following week if you feel the owner was at all receptive. Keep the communication lines open, learn more about the business and make a good offer. However, if you have a “gut feeling” that something is off or see any red flags, back out. You are in control. Even if you don’t immediately have someone willing to sell, you have a chance to create lasting relationships.
In the connected world of today, why would you not take to social media to find a qualified business to buy. If you look around, it is a rare practice, which is surprising given social media’s effects. Understandably, when posting on social media sites like facebook, LinkedIn or Google +, you may get your share of spam emails, or troll responses but you never know, you may find the right person through paid advertisement and have a deal on your hands you wouldn’t have received otherwise.
Think Outside of the Box
Take a creative approach – either place an ad in the newspaper or go as far as holding or attending a conference with the sole goal to attract business owners who are in your niche and looking to sell. Create an environment where they come to YOU to pitch why you should buy their business. In this scenario reverse psychology plays a huge role. You are the go to place, the important one that has to be convinced what the seller has is worth your money. It is somewhat unorthodox, but creativity and new ideas often lead to success. If nothing else, make sure you receive some press coverage and you may receive hot leads regardless.
In the end, buying and selling businesses is a numbers game. As with all things business, you must be thorough in your research and know what you are willing to pay and negotiate. Buying a business isn’t something that happens quickly, like buying a car or a house. It can take up to and even longer than a year to finalize all the necessary paperwork. When searching, evaluating and choosing a business to purchase, education and preparation is key.
Deanna Ayres is the Community Outreach Supervisor at The Marketing Zen Group. She loves to come up with new content strategies for and with her team and believes that connecting on a personal level is vital to success. Growing up in Europe has allowed her a unique insight into cultural differences in the business world. In her spare time she is a business owner, photographer, hobby cook with a love for coffee, gamer and geek. Connect with her on twitter, share your thoughts and ideas because collectively we can achieve greatness.