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Looks like most brokers operate like RE agencies. My business would be more attractive to another company loo

My business has a relatively expensive barrier to entry. This is what would make it attractive to another firm from out of the region. Sales are less than $3 million so it is small. Most of the area brokers, however, seem to be representing small service companies, franchises, or small retail shops. They are not attracting the type of buyer for my business. Where should I be looking for representation?

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Answers (2)
William A. Price
www.growthlaw.com
Business Lawyer
DuPage County, IL

You may want to start looking for logical buyers in your industry or along your value chain, and to ship 1-2,000 packets out to possible purchasers, to see if some inquiries about partnering or purchase come in. A good broker who specializes in your industry -- instead of in small retail shops -- might also be a source of purchasers and investors. The International Business Brokers Association, regional groups like the Midwest Business Brokers and Intermediaries, legal counsel with business transactional practices, accountants who do valuations and valuation professionals, business loan brokers, business loan officers (especially SBA loan specialists) at regional and national banks, and others who routinely work in the $1-10 million business sales space might help you with service providers or deal leads. Plan on being your own chief salesperson for this sale, just like you have been for the products or services your company has sold. The same people you've been competing with are your most probable buyers, and your entry barrier means you should have a unique selling proposition for them, not just your EBITDA.

The purchase price -- for any buyer -- will be their (not your) calculation of how much money they could make from buying your assets, customers, or company stock. Help them figure out how much that is, and why your entity and assets fit well with their existing portfolio of companies, products, services, or other business elements.

Hope this helps,

Bill Price

William A. Price
Attorney at Law
www.growthlaw.com

Nov 5, 2011
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The BAF Group LLC
MD

You need a small, boutique-like Brokerage, that deals with specific Sellers, rather than to the multitudes. You are correct, in that many try to book a lot of listings, figuring that any Buyer that then comes to them will find something to buy. It is the "throwing stuff against the wall" approach.

What you need is a company that specifically represents a small group of Sellers and promotes them individually. That means doing more than putting an ad in BizBuySell - although that certainly is part of it - to reach out to particular Buyers that may have a need or interest in such an offering. However, you can potentially expect to an up front marketing fee for that kind of service, which then is either deducted from the normaly fee, or more often results in a discounted fee that is ultimately charged at settlement.

Sep 26, 2011

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