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How to Find and Assess the Business Part 1

Written by: Timur Sultanov

Article Overview: Finding the right business will probably take a good deal of time and research.

How to Find and Assess the Business Part 1

Newspapers and magazines

You will need to start with national or local newspapers, or trade magazines and papers.

Use the Internet

Even if you do not have a computer yourself, find out how to use the Internet search engines and how to access the sites of the major publications, and go to a friend's or a library or an Internet cafe. It is not difficult and it will save you hours and hours.
By way of example, the leading search engine is Google. Try going to www.google.com and in the search box type "US businesses for sale". Within 30 seconds or so you will get pages of links to sites that sell businesses. When you see a reference that looks interesting, by clicking on the link on the screen you will be automatically transferred to the relevant web page. If you have an Internet connection at home you will find that the home page of your service provider will have a search facility. Many service providers use the leading search engines like Google to furnish their search facility anyway, so the result will be just as good as going direct to Google, Yahoo or whoever.

In the case of business transfer agents, you will be able to register your details on their sites, giving a breakdown of your requirements, such as business type, maximum price, location, and so on, and you will be automatically notified when a suitable business becomes available.

Business transfer agents

Don't just rely on websites and publications. You should call the business transfer agents and discuss your ideas and aspirations with them. In many cases they have been selling businesses for many years and have a wealth of knowledge to offer.

How to Find and Assess the Business

Naturally there are good ones and bad ones and you will soon get to know which are which. Although they are acting for the seller, not you the buyer, they will be keen to advise you and help you find the right business if they think you are genuine. They know that trying to sell a business to someone totally unsuitable rarely works because there is almost always something that prevents the sale from going through - the buyer may realise it's not right, he asks his accountant who puts him off, or perhaps the bank won't put up the money. A lot of time can be wasted this way, so good agents will always try to put the right buyer with the right business if they can.
It is also in the best interests of the client. As a seller of a business you would want to feel that your business is being offered to the right people, and you would probably know from experience that the agents that are most successful in selling businesses are those that take the trouble to get to know about the potential buyers on their books. Therefore, the more the agent knows about you, the more helpful he can be.
Here is the best advice when dealing with business transfer agents:

Tell the truth

Experienced agents can tell someone who is exaggerating a mile off, and if they suspect that is what you ate doing they will not be very helpful. They get many calls from timewasters and dreamers, and know that they cannot afford to spend time on. either. Be prepared to offer detailed and truthful information about yourself and your circumstances openly and frankly. They will then not only trust you, but will also be in the best possible position to help you find the ideal opportunity.

Give the agent your wish list

At the outset the agent will ask you for a run down on what you are looking for. Remember, you will need to be flexible to some extent - the exact fit is unlikely. However, as you specify what you are looking for, he will be able to offer you a considerable amount of general advice, and may help you fine-tune your thoughts.
At this point you will gain some indication as to how good this agent is. Try to find out, if you can, whether he charges the sellers an up-front fee, or whether he only charges when the business is sold. Unlike estate agents, it is not uncommon for a business transfer agent to charge a fee to put the business on the books. Some agents always charge an up-front fee, others only if they think the business will be difficult to sell. Some never charge an up-front fee. The latter only offer businesses that they feel a great deal of confidence about, and ideally these are the agents for you to deal with. Naturally, there will be some good businesses on the books of agents charging the up-front fee, and I am not suggesting ignoring them altogether, but obviously be a little more circumspect about believing everything they tell you.

If he's good, visit him

Most business transfer agents find themselves almost exclusively dealing with potential buyers over the telephone. If you want to stand out, make an appointment to see him. The personal contact always helps and, remember, when a little gem comes on the market you want to be the client who is first to see the details.
Now that you are on the agent's books (probably several agents), he will send you details of businesses he considers you might be interested to see.

Visiting potential businesses

Having now been given particulars of potential businesses, it is time to pay them a visit. You can, of course, ask for an appointment to see the owner. However, if it is the sort of business with public access, it is generally a good idea to have a quick look around first, before making yourself known. Agents will normally disclose exact locations as long as you are clearly a genuine prospective purchaser.
If it's a pub, spend a while there as a customer and get the feel of the place. Is it busy? Are the loos clean and modern? Does the place need a lot of money to be spent on improvements? Do they obviously have a lot of happy regulars? Are they patronised by football hooligans or other undesirables? Do you like the bar staff?
If it's a convenience store, walk in as a customer and look round. Is it clean? Is it busy? Are there stale loaves arid cheeses on the shelves?

What do you think of the general location?

You will be able to save yourself a lot of time if you can do this first. Save meetings for businesses that pass the test on this first look. However, in case this is a business you will wish to visit again, be careful not to be conspicuous to the staff. Under no circumstances ask to see the owner - any meeting must be arranged through the agent first.

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