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I have a pretty basic broad question/observation.

I have been actively looking for a business to buy for about 4 months. My background is heavy in sales and construction, and I have a bachelors degree in business with a minor in finance. My net worth is around $1.5 mil with 80% liquid. I wish to buy a business with a minimum SDE of $100K, that does not require a lot of hand holding. In my search, I have made some observations along the way. The 3 opportunities I looked at that were for sale by owner, I received candid upfront information in which I could make a decision rather quickly about the business. I found it refreshing to deal directly with the owners, because I could get answers candidly and quickly to my question. Issues I have run into in dealing with brokers range from, returning calls, vague answers, and time wasting meetings. So my question is, are there some pointers someone could give me to make working with brokers a more positive experience?

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The BAF Group LLC
MD

Scott, as a Broker, please allow me to apologize for the actions of some of our peers. The biggest problem I hear from Buyers and Sellers alike, is the lack of responsiveness they experience, with more Brokers than should be the case! In fact, I represent an $8 million Buyer who is offering to pay my fees as his Buying Representative, and I have been ignored by a Broker myself, over the past ten (10) days or so. It is inexcusable!

As for vague answers, none of us have all of the answers to all Buyers' questions; but it is our job to get those answers so that you, as the Buyer, has all of the information you need to make an intelligent decision about whether to buy a particular opportunity, at what price and on what terms. If we do not do that, we have failed. Vagueness is also inexcusable!

Time wasting meetings? I am uncertain about that. I sure don't want to waste my time, any more than you want to waste yours.

Ours is a simple process: If the Buyer has the experience, the basic financial foundation and the interest, what meetings? We obtain that fundamental information about you, demand a Non-Disclosure Agreement and then begin to give you the information you need, immediately. Meetings are required to determine your qualifications, but they should be focused and brief.

So, the only thing you should have to do is to be prepared for those qualifying questions: Do you have the skills and experience? (You might have a resume available for some opportunities, in order to shorten that part of the process.) Do you have the money? (A Personal Financial Statement would help, here.) If your professional background is in writing software, we would try to sway you away from investing in auto repair, without question. The same as we would try to convince an auto repair tech that buying a software development company is not necessarily in his/her best interests. But these are basics. (Part of the reason for doing this by the way, is that we want people to succeed; and part of the reason is that getting an SBA loan without related experience is very difficult.)

The real key is in the skill, ethical behavior and personal motivation of the individual Broker. As I have often said, there are good Attorneys and bad Attorneys; there are good Doctors and bad Doctors; Brokers are no different. Heck, there are good Buyers and bad Buyers!

I hope this helps and I wish you much luck.

Oct 18, 2013

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