Buying an existing business from an owner looking to retire or otherwise cash out is an attractive way to become an entrepreneur. But finding owners who are looking to sell may not be easy, especially at a price you are willing to pay.
This topic is often covered by many, and I have to credit the Wall Street Journal for many thoughts here. But the basics are really the basics.
Many business-acquisition opportunities aren’t always widely known, even by bankers who facilitate such deals, because sellers fear employees will leave once they know the business is for sale. Additionally, depending on the business, customers may be reluctant to buy if they find someone taping a for-sale sign in the window. So there are two schools of thought as to how they make their next move. One is that t they wait patiently for the right buyer to knock. The other is they move underground by contacting a network of accountants, brokers and lawyers to help them find a buyer.
If you are going to go looking for a buy, you can try to start with the accountants and lawyers. Accountants or lawyers who work with small-business owners might know of a client’s desire to sell. A second approach is to contact a business broker in your area. There are national organizations and if you are interested in a particular geographic location, a good broker may be able to help you find the right deal even if it is not nearby. A third approach might be to focus on one particular industry and contact owners directly.
If you go the direct route, try the strategy that one entrepreneur calls “call-mail-call.” Start by calling a few business owners in the industry and ask if they know someone who may be interested in selling. Don’t request an immediate answer, but say you’ll follow up. Two weeks later, send a letter with your business card reminding them about your desire to find prospective sellers and say that you’ll call again soon. Finally, call back to inquire if they’ve come up with any ideas.
This strategy shows that you’re a serious buyer. And even if the owners you contact aren’t looking to sell, they might know another who is.
Other resources are trade-group newsletters with classified ads. You can also read local business publications. As you do, look for business owners who seem old enough to be ready to retire. It’s possible that they want to but don’t know what they’re going to do with their business.
Good luck in your hunt. If you need help finding a good broker, give us a call.
The Fisher Law Office Attorneys provide Estate Planning, Estate Administration, Wealth Planning, Business Law, Succession Planning, Asset Protection and Security Clearance advice to businesses and individuals in Annapolis, Arnold, Pasadena, Bowie, Glen Burnie, Severna Park, Edgewater, Baltimore, Columbia, Stevensville, Chestertown, Dunkirk, St. Mary’s City, Washington, D.C., BWI Airport, Anne Arundel County, Prince George’s County, Queen Anne County, Harford County, Talbot County, Calvert County, Baltimore County, Baltimore City. We can be reached by email at firstname.lastname@example.org or on the web at http://www.thefisherlawoffice.com.