Separate Yourself From the Crowd

I get way too many emails from prospective business buyers expressing frustrations about business brokers. While many have valid points, often the confusion comes from misunderstanding their role. Most brokers are besieged with inquiries for their listings. I haven't seen too many who know how to separate a good lead from a bad one and so only a few get any attention. If you really want to buy a business then you need to separate yourself from the crowd.

The first step comes on your first point of contact. When you send in a reply to an ad, online or otherwise, all you want to do is state: "I am interested in this business. I am serious about buying a business and I have the financial capability to do so. Please send me the necessary disclosure documents to execute at your earliest convenience.". That's it...nothing more. If you don't get a reply within 2 days, call them. On this note, given they get tons of inquiries, if you have their full contact information then call them instead of emailing the first time.

Also, you may have to provide them with a profile and financial statement. This is a good thing. It's how they can help you. You are not compromising any negotiating position if they know how much cash you have. You will dictate the offer on a business not them but if they know you have the financial strength then they will let the seller know you can execute the deal. This is especially true if there are competing buyers in the mix.

In today's market when good business fly off the shelf, you need to distinguish yourself from other buyers. Anything you can do to show you are really ready to buy will pay huge dividends. Being prepared, having the right information, asking the right questions, and knowing how the process works are all simple things you can do to separate yourself from the pack.

Comments

[Andrea]

I want to take the time to thank you for this advice. I have just begun my search for a business to purchase. I contacted two brokers who immediately sent me disclosures to sign, and a few business listings. But it has been almost two weeks since I replied to them with a request for more information on the listings, with no reply. I don't want to reach a stumbling block this early in the process. I am going to use your advice and see where it takes me.
Thank you again.

[Richard]

Andrea - I know it can be frustrating at times but you have the right attitude. Stay focused and stay on top of them. You'll find that providing them with additional information will be a great help. If you want to read some additional information regarding buisness brokers and how a buyer can best work with them you can do so at: http://www.diomo.com/-Business_Brokers . Also, at www.diomo.com there are some good queries in the Ask the Expert section.
Richard

[Brad Welborn, CCIM RE/MAX Realty Group, Fort Myers, Fl]

Richard,

Thanks for an excellent article here and on Bizquest (Hey Buyers and Brokers - Can't You Guys Get Along?) which led me here. I have been a business broker for over 20 years and dealt with thousands of buyers. Believe me, there is nothing better that a Buyer who is QUALIFIED and READY to buy. That's how we make our money.

Buyers need to be open and forthcoming with what their goals and needs are, so we can advise them. Not only can we suggest other types of businesses they have not considered, but we can also lead them to other sources for help (CPA, Attorney, SBA, SCORE, state licensing requirements, small business help groups, etc.). Many states have different licensing requirements for business brokers and different laws as to representations. The buyer needs to ask how the broker will be representing him or her.