Choosing A Business

The past week has been quite interesting for the business for sale sector.

A recent survey by of 323 business brokers found that 53% of brokers report they are receiving fewer buyer inquiries than the year before and over three-quarters of brokers report that deals are taking longer to close than in the past.

The latter makes perfect sense due to general market uncertainty and financing challenges, but the statistic about less buyer inquiries is quite disturbing.

Regardless of the general lack of confidence most people have in the current economy, the market is nevertheless flooded with prospective buyers simply as a result of the unemployment levels.

The fact that those allegedly in the market are submitting fewer inquiries about businesses for sale is a telltale sign that the truly serious prospective business buyer has an incredible advantage right now.

However, this advantage is meaningless unless action is taken.

The starting point is to contact sellers and brokers to learn more about the business.

Simply looking at listings without getting additional details, will not yield any results. Yes, it is true, that many sellers have inflated expectations, and that financing is more difficult today than in past years, but when fewer prospects are contacting sellers, those that do put themselves in a much better position to structure attractive deal terms, with those owners who are equally serious about selling.

The second interesting development was the passing of the small business package in Washington. This $30 billion bill is aimed at increasing the flow of capital at the local level and a subset of it is the increased ceiling for SBA backed loans and their approval process – the future will dictate whether or not this actually translates into more SBA-backed loans getting done and so I welcome input on this development.

While there is a long road ahead to reach past levels of business for sale activity, it is abundantly clear that opportunities abound for those who are ready to “pull the trigger”.

To take advantage of the general malaise that most buyers are bogged down by, prospective buyers must get out of the looking mindset and take the next step of getting in front of sellers and that is a strategy that is needed regardless of the overall marketplace.

If you find a business listed that piques your interest in any way, get hold of the broker and/or seller and learn more. You may be shocked to learn what deals can be done in this type of environment.

One thing is certain, if you are not engaging sellers, you cannot complete a deal.

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