Tag Archives: how to buy a business

I’m Looking to Buy a Business

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“I’m Looking to Buy a Business“.  As a business broker based here in Florida  this is a statement that I hear often.  Within  the industry various statistics are stated regarding business buyers.  I have heard that 9 out of 10 of those that say they want to buy a business actually don’t buy a business.  Based on my experiences that statistic may hold true.  There are so many currently employed that during their 40- hour work week aspire to “be their own boss” by starting their own business or buying their own business.

Live Your Dream – Buy A Business

There are many unemployed out there that also think they may want to buy or start a business.  So while there are probably as many as millions of those both currently employed or unemployed that aspire to buy a business or start  a business, there is a much much smaller subset of those that even attempt to act on those aspirations.  Of that small percent that actually act on their dreams and or  goals a small percent may contact a business broker such as myself, and a small percentage of that group may find themselves at a closing table signing documents and actually buying a business.

Many business acquisitions are done with out the assistance of a business broker.  The numbers of how many entrepreneur types set off to buy a business and successful find a business without the professional assistance of a business broker are unknown to me.  I personally  had bought several businesses on my own without the assistance of a business broker.

These were strategic acquisitions within a certain industry.  I personally feel these types of acquisitions have a higher success rate.  Existing relationships, industry knowledge, focus,  and synergies provide for a higher success rate.   My views on this are based upon a fair amount of first hand experiences of myself and peers. This discussion is based primarily on non- strategic type acquisitions as referred to above.

Just one of the many steps in the process of buying a business that I assist in is how to apply some focus and some parameters to the basic statement of “I want to buy a Business”.  Being my company website is Sell a Business Florida I assume the person contacting me thru my website is looking to buy a business in Florida, but very often many of the other parameters have not been carefully considered.

When one is looking to buy a business criteria can range from looking at a certain specific company, to a certain “type” of business, to “I want to buy A business in the state of Florida”.  If you (or someone that you know) are currently employed and want to act on aspirations to buy their own business and gain the feeling of control of ones destiny, or are currently unemployed and view buying a business  to be the best means to a gainful career please consider the following.

Things To Consider Before Buying A Business

Below are a few parameters to consider when searching to buy a business.  The list can be long and extensive but the below is a starting point that allows the search to buy a business to maintain some focus.

  • Location-  For business purposes and family purposes does the business need to be in a certain State, County, City, or a certain side of town?  Or are you looking to buy a home based business that you can operate from most anywhere in the world?
  • Type of Business-  Are you looking to buy a certain type of business  like a Landscape Company For Sale or Towing Business For Sale , or are you looking to buy a business that has maintained certain performance levels such as “I want to buy a business that has at least 3 consecutive  years of  Net Income of $100,000+”.
  • Are you looking to buy a Hands on or Hands off business.
  • How much Available Capital to do you have? – This will set a range of businesses that you may consider.  Keep in mind that both Available capital for buying a business and Working Capital for running the business should both be considered.
  • Are you looking for a business that includes real estate
  • Are you looking for a business that provides Seller Financing?

Prospective Business Buyer– ” Hi Scott I am looking to Buy a Business in Florida” Scott– ” Great,  What type of business are you looking to buy” Prospective Business Buyer – “I really don’t know”

Internet Marketing For Dummies- By a Dummy (Business Broker/Business Owner)

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I am a business broker that works with business owners with the process of buying and selling businesses.  My profession of being a business broker is my own business. I have also owned another business of 20 years.  I am a business broker that has been trying to figure out this “Internet thing” for quite some time.  I think I am figuring out that I will never figure it out.

Internet Marketing Industry

It seems that there are a lot of Internet marketing experts and this industry appears to

Internet Marketing

Photo (c) http://dsm-publishing.com/

still be somewhat at the early stages of a rapidly growing industry.  As a business broker and business owner, I feel a compelling need to try to “figure this Internet thing out’.  Maybe I know more about trying to maximize the Internet than some, but the question of asking a business owner (that is not in the Internet marketing business) if they understand Internet marketing is akin  to asking someone if they are a golfer.  The average golfer may have a handicap of 20-25, Some golfers shoot at professional levels- 0 handicap, some people have never golfed, some have golfed once or a few times, some golf a lot but are still a 30 handicap (the higher the handicap the worse the score).

I am about a 12 handicap.  For Internet marketing maybe I am about a 12 handicap too I dont know.  I may know  more than some, but know there are a lot more that know a lot more than me.   My job involves many discussions with business owners regarding the state of their business as it relates to a potential sale of their business or a possibly buying another business. The  questions I have as a business broker are also questions shared by the plumbing contractor, the print shop owner, the restaurant owner, the card shop owner and the small business owners scattered throughout the world.

10 Internet Marketing Observations From a Business Owner / Business Broker:

  1. The Internet today is so different than it was 10 years ago.  Ten years ago, so many businesses didn’t have websites.  Those that did had these fancy Home pages with lots of “neat stuff”. And the site just sat there.  Now-a-days it is known that a lot of that neat stuff gets in the way of search engines.    A few years ago it seemed if you didn’t show up on google – you didn’t show up, and then came, Myspace, Facebook, Titter, etc. .  I am convinced the internet 10 years from now will greatly different than it is now.  Trying to figure out where it is going is the challenge.
  2. To me , I see the value in Social Media marketing is that it decreases my reliance on Google.  With Social Media customer have another way to find you.  You don’t need to show up on page one of google to be found.  I may be wrong with this line of thinking but this is my perspective.
  3. It feels like everyhting I learned yesterday, is almost outdated tomorrow
  4. I see the question asked so often online- Is anybody making any money on Twitter.  Twitter is growing at 1,000,000 new users per minute 🙂 doesn’t it just make business sense that some are making profit on Titter- I am not yet,  are you?
  5. Is internet marketing another strong way to reach customers, market
    Internet Marketing Business

    Photo (c) vistaphuket.com

    and advertise, or is it so much more.  As a business owner we know we need to advertise and market.  In the past and present we use the Yellow pages, direct mail, radio, maybe TV, trade shows, telemarket, direct sales.  Is it proper to view internet marketing as a very strong means of marketing and advertising or view it as so much more.  I tend to think to view it as so much more.

  6. Is it true that if you can drive mad traffic to your website you could sell ice cubes to an Eskimo?.
  7. Is blogging better than tweeting, is Facebook better than Twitter.  Do I need to post videos to Youtube?  How important is SEO, incoming links, adding more friends, social media buttons/widgets?
  8. Is email marketing dieing, improving, necessary, changing, or being somewhat replaced by social media?
  9. How do I do all that I should be doing on the Internet, without having to bear the cost of “sub contracting” that task out and still run my business.
  10. How will we be accessing the Internet down the road and how does that affect my approach.  It seems a few short years ago accessing the Internet with ones cell phone was a novelty at best.

I am just a business owner who’s profession as a business broker requires significant marketing efforts.  How do you find a business owner that is looking to sell a business.  This is a very confidential event.   How do you find a business buyer that is looking to buy a landscape company, a Towing company or a  Computer Repair shop?  My approach is of to try different things.

I Tweet the businesses I have for sale- I get some follow up questions, I blog about my business experiences- it has driven”some traffic” to my site, I am on Facebook- but pretty weak, I am on Linked-In and a few other social/business sites.  I personally feel value in writing a blog as it allows me control to provide SEO optimized current content to my site.

I certainly am not in a position to provide well grounded advise on this subject but my major point is- Are you a business owner confused about what you should be doing on the internet? – You are not alone.

Are Todays Job Seekers Tomorrows Business Buyers

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In Business Acquisition and Sales  the “pool” of  most future business buyers are currently employed by someone else right now.  The same applies for future Entrepreneurs.   But what about those currently unemployed?

The job market seems to have an abundance of very qualified people chasing a very limited number of jobs.  The number of those unemployed in the US seems like a fairly difficult number to track, but with unemployment in the 9-10% range-depending how you measure or guesstimate  it seems that you have well  over 10,000,000 (ten million) people unemployed here in the United States. Is owning your own business by either starting a business or buying a business a viable option for those unemployed.

Is Buying A Business The Future For You?

Is buying a business or starting a new business the right career path to all of those seeking to “re-find” a career or just get off the ranks of the unemployed.  Buying a business or starting a business is not for everyone, but it can be a very viable option for many.  There are the both mindset obstacles to overcome,  and finacial battles to be won before one can make the transition  from employee or currently unemployed to one that owns and operates their own business.

I personally think overcoming the mindset of  “can I do this?” may be the bigger of the 2 obstacles. To over use a saying- “Thinking outside the box”. Personally I feel there seems to be so many that are “trapped” inside the box, that  thinking outside the box in this situation can be a life changing situation.  I believe that many of those so many qualified individuals that are currently unemployed will consider “going out on their own” and enter the world of entrepreneur by either starting or buying a business.

For example- I am working with a business owner of a small computer service store, assisting him in selling his business.  He is very anxious to sell his store as he has plans to move out of state to be near a friend and join him in a business venture there.  He recently reduced his price to $65k due to his increased interest in moving on.

Buying A Business

Photo (c) lusens.com

He runs a viable one man business, works about 40 hour  weeks, and his business is up over 2009 numbers.  His “Owner benefit” is approximately $70,000.  So are you buying a job that pays you $70,000 a year?  Are you buying a career?  Are you buying the ability to control your career? It can be a nice situation for the right person.

Sending off resumes, searching the job board, going on job interviews can almost turn into a routine that may seem to have no end.- Is it a comfort zone, is it doing everything you can do to find your next career.  I suggest spending a few minutes  looking on a website such as mine Florida Businesses For Sale , or maybe some other larger business for sale websites like www.bizbuysell.com or globalbx.com, or possibly look on Flippa.com to see what sort of businesses for sale are out there, or possibly a website, or e commerce site may be available, what are the cost,  and is it even a possibility based on ones current situation.  I think one should at least allow the concept of buying a business or starting a business to come into the equation.  Certainly owning or running a business is not for everyone, but is it for you?

5   Reasons not to consider starting your own business or buying a business.  – Or maybe you should…

  1. Money is needed to buy a business or start a business–    but do you have any realistic feel of how much it would take.
  2. Ive never bought a business before or started a business before – talk to most all businesses owners that have owned their business for 10+ years and they will also say the same thing.
  3. The economy is doing so bad now, its just the wrong time to try a new venture.- There are many business owners that have and are delaying the sale of their business.  A “pent up” demand is being create.  The workings of supply and demand show that as supply increase prices reduce.And of course also  the choices are more abundant.
  4. Some people are just more prepared to buy a business or start a business.  This is true, but are you one of those “some people”.  When you talk to long time business owners you learn that all the uncertainty that you may have while making this major decision is completely normal.
  5. My Job Searching is  really going well- I think that is great, my decision to “be my own boss” 20 years ago was about controlling my own destiny,  perhaps there are different ways to do that.

My profession involves a lot of time talking with business owner regarding their short and long term business plans.  Many current business owners feel they need to get their financials/ and Sales  back up to a level commensurate to the value they seek from the sale of their business. This is creating somewhat of a pent up supply   I also speak to many potential business buyers and understand that everyone’s situation is so different. Available money, family, location, other personal matters all go into the evaluation.  Part of my long term planning of my business broker activities does assume that many of todays unemployed will be tomorrows business buyers.

Business for Sale-Who, How Many, How Much?

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I am a business broker based in Florida, and  also a member of an Association called  the Business Brokers of Florida.  The Business Broker of Florida  Association (BBF) is the largest state business broker association in the country and the second largest association of business brokers in the world.   The activity within this association does provide the business owner and or entrepreneur some insight into actual activities related to businesses buying and selling.

Most all business transactions involving the sale of private companies and information regarding this activity remains very private.  And accurate pertinent information can be difficult to attain.  What does a business similar to yours sell for?,  How long does it take to sell a business like yours, and how many businesses like yours are being sold.  One can search and view a lot of information regarding Florida business being bought and sold at Free Search on Businesses For Sale 

Businesses For Sale In Florida

Florida is experiencing the current economic downturn and is somewhat representative of the US economy.  Actually Florida may be feeling the effects of the downturn more than most of the US  as its economy seems very tied to the real estate industry.  I have always found value in trying to understand some of the numbers behind the numbers to help me to perform my role as a business broker. The following are some items of note  as it relates  to business buying and selling activity in Florida.

Certainly not all business sold do  involve a business broker, nor are all businesses sold in Florida handled thru this association, but as a rather large association it is fairly  representative of the buying and selling activities in Florida.    Web based businesses and or websites may be sold at an online auction, larger  “brick and mortar” companies may seek larger M&A firm for representation, but the activity within this association does provide some insight for the  business owner outside of Florida that may buy or sell a business.

Per the currently active listed data available thru the BBF Association-   As of today almost 4000 business are for sale of those:

1) Businesses For Sale in Florida over $10M –      5

2) Businesses for Sale in Florida Priced over $5M-   30

3) Florida Businesses for Sale Priced over $1M – 330

4) Businesses in Florida For Sale with Net Income over $100K – 1227   

Other observations:

a) Largest type of business Listed For Sale in Florida– Restaurants – 773 (this represents almost 20% of all businesses listed)  of those 223 have Net Income >$100k.

b) Home Based Business For Sale – 402 (represents about 10% of all businesses listed for sale)

c) Florida Internet related businesses for sale 43, of those: Asking Sale Price $1M+  is 8, those with net income over $100k – 20

Businesses Sold in Florida thru the Business brokers of FloridaFlorida Business For Sale

of all the business sold in the last year (6/2009-6/2010) Here are the following Averages on Florida Business Sold.

  • Average Sales/Revenues- $636k
  • Average Selling Price- $252k.
  • Average Adjusted Net Cash Flow – $114k.
  • Average number of Days to sell the business- 226 days or approx. 7 1/2.   Please note this figure does not include business that got listed for sale and did not sell. Estimating those in  the average time to sell a business may exceed a year(my guesstimate ).

If you own a business and do not plan on exiting from that business for several years, it still makes sense to understand the value of your business.  What is the asset that you have worth?  What sort of multiple of cash flow should your business sell for?

Understanding what other similar businesses are selling for does provide some basis.  but the devil can be in the detail…  Also growing your company thru acquisition can be both a viable and profitable business decision.  What may it cost to acquire a synergistic company?  A review of some reliable numbers may be a good first step in the needed due diligence.

(some info shared above compiled from Business Broker of Florida Assn website as of 7.30.2010)

Starting Buying Selling a Business: What Are They Thinking?

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Want to start a business?  Want to Buy a Business?  Want to Sell your business?  These interest are very different but there is one common element among these significant business decisions.  Money- .  While working with business owners and individuals with the process of buying and selling businesses, I consistently come across a common element that I believe would be surprising to most that are ” looking from the outside in”.

Money is always a determinant factor in the process, but so very often it is the other factors that create the motivation that steers the process.  As a  small business owner or one that recently started a business one wonders if the thoughts, trepidations, or concerns that you have are shared by others. It is common to wonder if others struggle with decisions such as you.  What are some of the thoughts others have regarding these important decisions.

Motives Behind Buying/Selling A Business

Buying A Business

Photo (c) expertbusinessadvice.com

Currently I am working with business owners that are selling their businesses and it may be somewhat surprising that money is not the primary reason they have decided to sell their business.  But make no mistake all business owners want the maximum amount they can attain for their business but the reasons for selling  are varied and different.

I am also working with several individuals looking to buy businesses and they as well generally are looking for some sort of change.  Again they are looking  for value in the business they are seeking to buy, but the reasons they are looking to get into something different are also varied and diverse.

Many  people out there, and readers of business articles such as this are contemplating change.  So many of tomorrows business buyers are employees that are working for someone else today.  They are seeking change.  Many of the business owners  looking to sell their business are seeking change. Most all starting a business, buying a business, selling  a business are seeking change.  When talking with seller of businesses and potential buyers of businesses one learns the “why” is varied, and comprises similar thought processes I experienced as one that both started a business, bought several businesses and sold my own business as well.

Perspective very often if the difference maker in what drives this business decision. The excitement and energy that comes along with doing something new where the roads ahead are full of unknowns and optimism  can certainly provide different perspective than the business owner that has experienced the challenges and sees the roads behind him. The reasoning behind the decision to buy start or sell a business may look very similar but it really is the perspective that provides the different “take” on that reasoning.

I want to Buy a Business, I want to Start a Business because…” –

1)MONEY– want to make lots
2)PASSION– I love making widgets
3)ACCOMPLISHMENT– It just feels good
4)OBLIGATION– It was my families business
5)EXCITEMENT– I love working 24/7
6)CONTROL– I control my own destiny
7)OPPORTUNITY– I’m young-limitless
8) CHANGE– I want to do something different

“I want to sell my Business because “-


1)MONEY-Not making enough, money is less important
2)PASSION– I used to love making widgets
3)ACCOMPLISHMENT– The feeling of accomplishment is gone
4)OBLIGATION– My family is no longer around
5)EXCITEMENT– after working 24/7 I am now Burned out
6)CONTROL-Insurance Companies,employees,IRS,State,control my destiny
7)OPPORTUNITY– I feel old- exceeded my limit
8) CHANGE– I want to do something different

While the list could go on and on, Contrary to common belief—– Its not always JUST about the money.