Forbes.com
October, 2016
The Business for Sale Marketplace - Why 90% of Listings Never Sell
by Richard Parker
So you’ve had it working for someone else. That’s it; never again. Now it’s your time. You are finally going to do what you have always dreamed of – you are going to buy your own business. Great plan and very exciting! So you start scouring the online business for sale listings and after endless hours looking you realize four things:
- You cannot believe how many businesses are listed for sale
- There is absolutely no rationale to the terminology, asking prices, financial information or details about the businesses in the ads in the online business for sale databases
- Regardless of how many inquiries you submit, you receive very few answers
- There has to be a better way to find good businesses because your initial strategy is not working - you are spending a ton of time searching and not making any progress
I hate to age myself or live in the past, but many times I think the business for sale marketplace was better off without the Internet. Yes, the glory days when you found businesses the old fashioned way by networking, tapping into brokers or scouring newspapers, trade journals and industry associations for leads. On the one hand, the Internet has been nirvana for sellers and business brokers since businesses can be advertised for a fraction of the prior costs and the buyer pool is now global. The downside is that directories are flooded with listings and prospective buyers pay the price, not monetarily per se, but with potentially wasting enormous amounts of time looking through listings that are not worth buying.
In some categories like the business for sale marketplace, the Internet can be a deep black hole with no end to the amount of generic and often times useless information, and so the process of trying to find a business can result in nothing more than an endless looking exercise. Thankfully, there is a better approach.
While the online databases like
Bizquest and
Businessesforsale can be an excellent starting point and can yield results for a some business seekers, to really gain access to a wide selection of opportunities, prospective buyers cannot limit their search to strictly what is available online. They have to expand their hunt and modify their strategy by conducting direct solicitations of businesses not publicly listed for sale.
Richard Gadberry, a Dallas-based mergers and acquisitions advisor put the buyer search exercise into realistic yet sobering terms: “According to the IBBA, the governing body of our industry, the percentage of listings that won’t sell is more like 90%. Therefore, it is a daunting task and frustrating for a buyer to wade through the numerous listings that are overpriced, have unsupported cash flow, lack information, and brokers who are not well trained. So the best route is to assist a buyer with a direct search, because the best listings are not on the internet.”
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