Every Business is for SALE

Summary Points

• Finding profitable businesses for sale is the hardest part of being a successful acquisition entrepreneur

• Fishing upstream is one of the best ways to get access to good deals before they are shown to the market

• Pay for Play is a great tool to able to see deals from beyond your personal network and see better quality listings

• Cold calling is the hardest but most effective method for getting off-market listings before anyone else can compete. It is a numbers game and if you have a consistent approach, you can get some great deals

How do you find businesses for sale?

There are plenty ways to find businesses for sale, but only a few that actually work and are worth your time.

One of the most common ways to search for listings is with sites like bizbuysell.com and bizquest.com. Both of these sites are useful for familiarizing yourself with the industry lingo and what types of businesses are selling, but they usually are not ideal for finding the best deals.

Let me explain.

Typically when a business owner wants to sell, they will reach out to there private network first (including competitors) and ask them if they are interested in buying their company.

If that doesn’t work, then they will reach out to a business broker and start the process of listing their company for sale.

At this point, the broker will shop the business to his buyer’s list and others to see if there is any buyers ready to pull the trigger before it is publicly listed (same as real estate).

If that fails, then the broker will list the business for all the world to see and that is when you will see it on sites like Bizbuysell and Bizquest.

Now this doesn’t mean that there aren’t any good deals on those sites, it is just that they are far and few between. I have found good deals on these sites myself but this takes a LOT of due diligence and careful sorting to find the diamonds in the rough.

So then how do you go about finding good businesses for sale.

You go fishing upstream.

Fishing Upstream

Earlier in this article, I explained the journey that a seller goes through when they decide to sell their business. It starts when the seller is in a position where selling makes financial and personal sense.

To get access to a profitable business BEFORE the rest of the world sees it, you need to go upstream and make connections and relationships with the people that sellers are first talking to when deciding to sell their business.

These people include (in random order) brokers, lawyers, accountants, and realtors.

This is where conversations first begin with sellers and if you have an open line of communication with these sources, you will get first dibs on making a play for the business.

This is a HUGE advantage.

Think of it as trying to get a good paying job on the market.

If you are just searching Indeed and Monster and applying to jobs, you have a tiny chance of ever getting noticed by the hiring managers.

If it is a high paying job, then likely thousands of applications will pour in and yours will be lost in the shuffle.

In order to stand above the crowd, you need to go upstream and start to connect on LinkedIn with employees at the company. Ask them for advice in the application process and introduce yourself on Zoom calls.

The result will be that your name will be floated to the hiring manager by their colleague, that you connected with, and your name will automatically be floated to the top of the pile.

This is the exact thing that will happen when you build those relationships with upstream sources.

Pay for Play

Another way to get access to deals before most other buyers is to pay for software providers. There are a few names in the space that have been around a while, Privsource and Axial being a couple options, where they charge for access to pre-screened seller listings.

These sources have their place and are used frequently by PE groups but I have not used them in my searching.

One newcomer that is worth mentioning is WithKumo.com.

WithKumo is a business listing aggregator on steroids. Instead of site like Bizbuysell and Bizquest that rely on sellers and brokers inputting the data and uploading their listings, WithKumo scrapes thousands of sources and aggregates all of the listings in one convenient site.

WithKumo is going to be a game-changer in the space and they have some pretty exciting plans in the near future.

Check them out and try them for free for a 14-day trial.

Call me maybe…

The last way to get access to businesses before ANYONE else does is to pick up the phone and start dialing.

This is obviously the hardest method as you are going to get a lot of voicemail and people hanging up on you. But it is a numbers game. The more numbers you call, the more likely you will get a seller open to a discussion.

This method, if done correctly, can yield the best results. It is the most work, by far, but if you have the time and confidence in your approach, you can find some amazing deals.

Till next time

I hope you received some value from this post and if you have any questions or want to learn more about business acquisition, then send me an email at [email protected]. I love hearing from all of you.

Ben