If you have been searching for a business to buy,then you have entered the baffling 'Business Search Maze'. Not everything appears to be what it seems and businesses can come and go as if they never existed...."
By Rob Semmel
Welcome to the search for a business to buy! It's a time that should be exciting and rewarding, but unfortunately can also be a costly and time wasting exercise. Buying a business today is not easy, and even finding a business or franchise to buy is hard when you do find it, getting that business on the right terms, and at the right price is a significant challenge.
The traditional business search
We are fortunate today that the process of searching for a business to buy is right at our fingertips. There are numerous websites available with all types of businesses for sale, from all types of brokers. These websites have been designed to be user-friendly. Simply fill in various criteria of the business you would like to buy and commence your search. You should be presented with businesses that match your selection in terms of industry, price and location. These ate thousands of businesses to choose, from all types of industries. You can also choose businesses that are not yet trading. Business brokers from around Australia pay to have their listings submitted, so they appear in your search. The more times the business appears, the better for the broker.
Why the traditional system is flawed
Like many things in life, what should be a simple process, can be exploited. Whilst the websites are an excellent tool to match businesses for sale with interested buyers, unfortunately, a few business brokers have contaminated the information, and instead of buyers finding a perfect matching business, they have entered into a maze, having to guess to determine the fact from fiction. As business buyers advocates we continually meet buyers that have wasted so much time and money to find a business. They have invested hour upon hour looking for a business to buy to set themselves up for the future but to no avail.
The 6 reasons why this system is flawed
1 Old listings never die - Some brokers never remove their old listings from the website. Contacting a broker and asking about a listing and then be told "it's under contract" or "it's just been sold" can be frustrating. This may be true, or possibly the broker may have had the listing for sale twelve months ago and claim to have forgotten to remove it from the website. Many websites have old listings that have been withdrawn from the market or have already been sold. Some brokers use this ploy as they have few listings or alternatively they hope to redirect buyers to other listings they have in their books.
2 The one business in numerous locations - It's not uncommon for a business broker to have the one business advertised numerous times in various locations. The one business is doubled up over and over across locations. Whilst most brokers will use the same content, others will change a few words to make it appear to be a different business.
3 The ghost listing - The business never existed or was never for sale. Some brokers will make up listings that never actually existed. Little information will be available or the listing will be vague.
4 Two for the price of one - Some listings are advertised by two different brokers. This is typically where a general authority is held by both brokers. Either broker can sell the business but in many situations, the information differs or even on occasions the asking price varies.
5 Lack of information - The greatest time waster is the lack of information available on the website. Some brokers will suggest that the information is confidential and that unless they are contacted directly or have a meeting arranged in their office, they cannot provide any further business data. The hidden agenda here is possibly they don't have any further information, they have listed the business too early or ultimately that the business does not "stack up". Don't be surprised if the broker will only discuss the nature of the business in a private meeting, particularly if it is a cash business.
6 Where's the broker gone? - The brokers went missing. You have tried to contact the broker as per their request and there is no feedback or call back. The website has given their details but it is strange that when contacted they provide little feedback or assistance. The buyer is left wondering whether the business actually existed.
Whilst "Business for Sale" websites have thousands of businesses for sale throughout Australia, no one has all the listings. Some brokers advertise on the majority of well-known websites and others only on a few and therefore rely on their own branded website. It's a huge task to cover all websites and all business opportunities to find the right business.
From our perspective as Business Buyers Advocates, finding the right business, on the right terms, and at the right price is paramount. I hope the detail above helps you to cut straight through to the detail that matters on some of the information you're seeing out there!