First the dreaded statistic: 80% of all buyers looking to buy a small to mid-sized business in California never end up doing so! A shocking statistic to most buyers searching to buy a California small business.
Helpful hints and strategies below such as understanding how California business brokers and agents actually operate, keeping tabs on all the new listings that come to market, making sure you sign up for FREE Email Instant Alerts of new/refreshed postings that match your search criteria, and submitting a Business Wanted To Buy Posting that is emailed to all brokers, agents, owners who have businesses for sale that match your criteria (your posting is also featured online in all relevant areas on BizBen as well). Since I consult daily with many potential business buyers, I know what works and what tactics business buyers should avoid to not only waste time, but also to not lose any money on needless practices and resources.
WHAT MOST CALIFORNIA BUSINESS BUYERS DON'T KNOW - BUT SHOULD ABOUT THE BUYING PROCESS
1. Most buyers of California small to mid-sized businesses don't realize that 70% or more of California business brokers and agents don't cooperate on their (business for sale) listings - meaning they don't share their information with other brokers and agents either intentionally or unintentionally by not advertising or promoting their listing(s) to other California business brokers, agents, and intermediaries.
2. Most buyers call only a few brokers or agents thinking/hoping the broker will "find" or "search" for them and find the ideal business to purchase. Most business brokers and agents are so busy trying to sell their own set of listings that they rarely have the spare time to do non-paid searches for a buyer who may not end up buying a business.
3. 60% of all California small businesses for sale are not advertised or marketed - they are "pocket listings", "unadvertised listings" - these are listings that business brokers and agents don't have listed but know about because of their daily dealings with small business owners in California who want to sell but will not give a contract or written listing to a broker or an agent. They will sell if the broker or agent brings them a "serious buyer". What this means to you as a serious business buyer is that you have to get the word out to as many California business brokers and agents as possible to widen your "comprehensive search process".
4. In all business brokers directories only the main broker is listed - in most instances there are more (sometimes up to 5 to 25+ agents) that aren't listed but have great "pocket" or "unadvertised listings" that others in the office don't know about - you need to reach all these business brokers & agents directly because of #3 listed above.
STEPS ALL SERIOUS CALIFORNIA BUSINESS BUYERS SHOULD DO TO BE SUCCESSFUL:
1. If you know what types or locations of businesses you are searching for you need to post and keep posted at all times a Business Wanted To Buy Announcement Posting or utilizing the BizBen Business Buyer ProBuy Program and get the word out to as many California business brokers, agents, intermediaries, and owners as possible - you need to be highly visible - this step provides that!
2. You need to scan the new and refreshed business listings for sale (save all interesting listings to your BizBen My Admin section when you are logged into your FREE BizBen Account) posted everyday at BizBen. On average over 400 new and refreshed postings / listings are posted daily and in many instances offers and letters of intent come quick on the more popular new listings - don't miss out on these - check the new listings daily (register for Instant Email Alerts - customize these to types and areas of businesses wanted to buy) on BizBen (but don't forget to search on all older posted listings too and "Save" them to your BizBen MyAdmin section - after you login to BizBen).
3. Sign up for a FREE BizBen User Account to receive new listings/postings by Custom Instant Email Alerts and Daily Email Reports of all new and refreshed postings / listings posted that match your search and buying criteria. Make sure you put @penrosent.cn in your "Safe List" in your email program/software so these Email Alerts / Reports don't end up in your spam or junk folder - you do not want to miss out on any great new listings/postings posted and emailed to you.
4. Contact as many of the business brokers and agents listed in the California Business Broker Directory on BizBen with your request (let these brokers and agents know you saw their info in BizBen) - what types, locations, prices, adjusted net income - what you want in your ideal business you are searching for. Make sure you get them a Business Buyer Profile / Personal Financial Statement and a Non-Disclosure on any of their listings they may be selling (email these back with their NDA/Confidentiality Agreements). Stay in touch will all of these business brokers and agents on a consistent basis - see step #1 above - post a Business Wanted Announcement - the buyers who are more active and visible tend to be the ones who get the better businesses being sold!
5. When contacting a seller/owner, broker, or agent about a business for sale on BizBen make sure you phone, email and text the contact about the listing - in other words do all three actions to show them you are serious about their business for sale - remember - phone, text, & email. Don't rely on email alone or just a phone call - to many emails these days end up in the junk folder for one reason or another - don't let this reason void your chances of not buying a business - remember to call and text as well (also please let the seller or broker/agent know you saw their listing on BizBen!). If a broker or owner doesn't return your call / email / text keep trying them daily until you get results!
6. Make back-up offers on all businesses for sale that you are highly interested in that may be in escrow or contract. Show the broker/agent or seller that you are interested and willing to move forward if the current buyer starts lagging or terminates their purchase agreement. 50% of all California deals fall out for one reason or another - I have seen many buyers with back-up offers ultimately be the "winning" buyer on a deal when using this strategy.
7. Make sure you have your "team" in place and ready to go - transactional attorney (review of purchase agreement contract or LOI, lease agreement, etc.) phase l and phase ll due diligence advisor, escrow/bulk sale service, business purchase financing advisor (get professionally pre-qualified before your search process begins), industry specific consultants, etc. If you aren't ready for a transaction should a business become available for sale you will probably be relegated to a back-up position - bottom-line be ready with your "team" of advisors.
8. If you really like a business being sold - make an offer - "pull the trigger" - too many potential business buyers are tentative or too analytical and wait too long to make an offer (they lose out on deals because they take too long to produce a purchase agreement or LOI). If you are interested in a business - particularly a business being sold that is high in demand by other buyers - put in a non-binding LOI (letter of intent) to "lock-out" other potential buyers until you can fully investigate the business and know if you want to fully commit with a detailed business purchase agreement.
If you follow the above steps - and I mean all of them you will be successful in buying the best California small to mid-sized business that match your personal needs and search criteria!
If you need assistance with any of these steps above or are interested in the BizBen ProBuy Program please phone us at 888-212-4747 (if you happen to get our voicemail - please leave a detailed message and we will phone you back promptly).
|Helpful Resources To Assist In Selling And Buying California Businesses|
|Diane Boudreau-Tschetter: Escrow & Bulk Sale Services - CA
California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.
|William F. Ziprick, Attorney: Legal Services For Buyers And Sellers
Through creative problem solving, attention to detail, accessibility, & understanding that unnecessary delay is often a deal killer, I work closely with my clients and other professionals to consistently achieve a high rate of closings. Office: 909-255-8353, Cell: 509-951-7230.
|Helen Yoo, New Century Escrow - Escrow Services In Southern California
New Century Escrow, Inc. is a fully licensed & bonded independent escrow company. Over 20 years combined experience in handling bulk escrow transactions. Multi-lingual staff that speaks your language, including Korean, Chinese, Vietnamese. Call Helen Yoo direct at 626-890-1151.
|Brad Steinberg, Business Broker: Laundromat Specialist
PWS is the leading laundromat broker in California. Since 1968 PWS has brokered over 2,500 laundromat sales. With over 90 employees dedicated to the coin laundry industry, PWS has 18 licensed agents, a 3 person in-house finance department, 10 service technicians and a 20 person parts department.
|Shalonda Chappel: Escrow & Bulk Sale Services - Southern California
Escrow services to brokers/agents, sellers, & buyers. Established 43 years. Extraordinary service. Experienced with handling difficult transactions. One stop for all your escrow needs: Bulk sales, lien searches, UCC searches, liquor license transfers, publishing & recording services. 951-808-3972.
|Elizabeth McGovern: Escrow Services - San Francisco Bay Area
McGovern Escrow Services, Inc., is a leading independent escrow company. We are a trusted partner with our clients, assisting them through the tangled bulk sale & liquor license transfer process. We provide attentive, quality & innovative customer service. Phone Elizabeth McGovern at 415-735-3645.
|Janet Carrera: Escrow & Bulk Sale Service - SF Bay Area
Redwood Escrow Services, Inc. is a full service, licensed independent escrow company. We are EAFC Fidelity bonded, fully insured & licensed with the Department of Corporations. Committed to offering our clients the most comprehensive variety of escrow services available. Phone Janet at 510-247-0741.
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