Buying a Business is about the Buyer and not the Business
Most business opportunities are found on the internet at business for sale websites. The sad fact, detailed in 7 Critical Points Every Business Owner Must Know Before Selling Their Business is that over 80% of all these listings never sell. The really good general opportunities go quickly, generally in a bidding war. What is left are a combination of good deals for very specific situations, or marginal to very bad offering. The odds of finding what you really want in this environment, especially when you're not exactly sure what that might be, are very slim. To make matters even worse, when you try to learn more about a listing, you face the seller and the seller's agent. No one is on the business buyer's side. The risks seem too high, so generally nothing happens.
Given you are one of the lucky ones that catch a great financial opportunity, it may turn out you're not so lucky. The majority of business owners are selling because of burn-out. They have their business on the market because they are simply tired of running it. If you purchase it because if the financial opportunity they originally also saw, what happens is you replace your current dis-satisfactory position with a new one that. like the current seller, will again produce burn-out over time. Gambling can be fun; but not betting your future on odds as bad as these.
The fact is every Executive has talent that in the right place are productive, profitable, and the source of genuine personal satisfaction. This is engagement; and the first step in buying a business is to know what business will foster your personal engagement. Get that right, and the money will follow. Get it wrong, and join the burn-out bunch.
The Executive Advocate Buyer program is Buyer-centric as opposed to Business-centric.The obvious first step is to document the Buyer. To rely on self-assessments and the opinions of those trying to sell you something is a fool hardy approach.
A Personal Business Model will be developed first for the Buyer. At best, a business broker can tell someone how well a Seller did with a business. A Personal Business Model helps determine where the buyer will do well. You can schedule a Personal Business Model Workshop outside of this program using the form on this website.
The Personal Assessment is combined with other factors such as Business Experience, Financial Resources, and Geographical to produce a Search Criteria. Murphy Business maintains a direct marketing organization at its headquarters that specialize in contacting the owner's of privately held businesses. These professionals are given the task of finding unlisted businesses where the owner is interested in selling. Almost always, they are suffering burn-out and they represent an opportunity for an engaged buyer to do extremely well. There is an art to getting the attention of these owners. They are accustomed to being contacted by business brokers fishing for opportunities to list. It takes multiple contacts and the development of some trust before they will speak openly to us. However, once they do, we have the second deliverable, which is a number of possible businesses to buy that meet the buyer's personal criteria.
The Executive Advocate client then chooses which opportunities to pursue. At this point additional time is spent with the prospective seller to generate and validate a suitable price for the business. This is done in a personal environment without having the intrusion of other potential buyers from a public listing. The valuation process can be somewhat complex, especially if the assets of the business include real estate, expensive equipment, or intangibles. Having the buyer's representative in developing a valuation is a tremendous advantage in expediting teh coming due diligence process. The buyer's deal team has been aware of the inner working of the business from the beginning.
Purchasing the business
Once the valuations are done, the Executive Advocate client decides which one should be given an offer to purchase. Here brokerage expertise is extremely important. There is an old saying, You can name your price, if I can name my terms, which applies here. There are multitudes of ways to transition the ownership of any business and if this is the right opportunity, one can be found to reach an agreement with the seller. From there, the information used to value the business is validated, necessary financing is obtained, and other conditions of the purchase offering are resolved. From here a closing with a transactional attorney is arranged for the buyer and seller and the ownership of the buyer's ideal business is transitioned to them at closing.
Begin with the End in Mind
What makes this work it a focus on the needs of the Buyer at every step. A business transition should always be about the Buyer's success and not theoretical cash flows. Use the Contact Us form for additional information on buyer--centric representation.