In an effort to help you all find more deals I am going to provide my perspective on the world of brokers and their respective websites. Or perhaps the websites and their respective brokers. Both exist in big numbers. I usually start with big search engines such as Bizbuysell, where you can find loads of businesses for sale and the contact info for the brokers that represent them. There is also Bizquest, which does pretty much the same thing and I think is owned by the BBS people. There is also Globalbx and a whole bunch of others which you can easily run a search for.
These are search engines for deals and thus overlap quite a bit in that they duplicate listings quite often from site to site. So once you go through the listings for these guys you may well want to jump into the individual broker listings from the myriad brokers sites out there – they all have their own sites. This way you will get many local brokers as well as the individual listings for national brokers (Sunbelt, Chapman, Generational Equity, VR, etc). All have viable deals at one time or another.
Let me qualify that. Most deals you see on the search engines will be small. You will see a real world distribution and smattering of deals of all sizes and shapes. But most will be quite small since the vast number of small businesses are…. small. By small I mean they will be under $1mm in sales for the most part. The SDCF will be under $300k for the most part. Do not let this deter you from finding bigger deals. That said, by all means buy a small deal if you are sufficiently desperate. Just realize that it will probably require that you be hands on and doing everything inside the company.
So you will see a lower percentage of deals over $1mm in sales but you will want to screen for this size and make sure your geographical filter allows for enough bigger deals. I often run searches for keywords for particular industries which I know will usually have sufficient size. So when you dig you will see enough companies with size. Just be aware that you will want to check back often for new deals as they arrive on the site. There will be lots to choose from but not all on the same day.
Similarly you will want to check with other individual broker sites as not all the listings show up on the search engines, they may be exclusive to the local sites. And in some cases deals may not even be advertised or are too new to show up anywhere. Brokers may well inform you of these deals on the phone but they are nowhere to be seen on any website.
The search engine sites, as well as the local broker sites, all have one common failing in my humble opinion. The lack of information. You cannot tell much of anything from the listings. They offer up the asking price(usually), sales and earnings for one year(maybe) but nothing else. Compare this with an executive summary from a legitimate broker (or even a real estate listing) and you would conclude the search engines really don’t know anything about the deals they offer and you’d be right.
However, you can go through quickly and spot the interesting deals which is one advantage. But do not stop there. Many of the good deals are undermarketed, overlooked outlier situations that people may not even put on the internet. For example some of the best opportunities are when an owner dies and the company is then sold from his estate. The last thing anyone thinks of when handling an estate is putting some listing on a website. And often a divorce may be responsible for the sale. This is when networking with lawyers, accountants and other professionals can be beneficial. They will likely see these deals before the brokers.