So with the uptick in activity in business sales at the middle market level so too has the uptick of buyer inquiries. A shocking statistic for all is that 90% of buyer contacts that reach out to inquire on listings never pull the trigger. That my friends is a massive number and one that deserves some exploration.
There is little empirical data studying the activity of buyers but we do know the following from interviews and observations.
1. Buyers are generally un-educated regarding the terms, process and marketplace dynamics, seller expectations, and financing realities.
2. Fear plays a huge part in mitigating the ability of buyers to “pull the trigger”.
3. Financing
EDUCATION: Lets start with #1 and naturally its the most important. Anyone contemplating the purchase of a business needs to understand the playing field they are on. It is normal and natural for a person to bring the knowledge and experience from prior lives to the table but in reality at the main street level little to nothing will prepare you for what you are about to do. In short “Know what you don’t Know” and get educated…. use multiple sources not just a book or friend….look for educators and support persons who have been in the trenches and been tested by fire. The Goal is to be Wise ….not technically smart about the process and deal you are about to do.
FEAR: Fear is driven in large part by the unknown…..take care of #1 and we address a large part of number 2. That being said it will not go away…it should be embraced as the thing that helps you be cautious and careful.. But identify your greatest 2 or 3 fears in the process and talk them out and address them. Realize they will not go away ……ever. If you cant deal with that don’t do this process
FINANCING: This ties up in number 1. Get comfortable that the lending process if it even applies is brutal here and very much one sided to the bank. Also get comfortable with the fact that most deals wont qualify for a bank financing. Small business operates in a different world and as a business owner you will sign on the line for everything…in essence live on the edge. Get comfortable with that fact and know the financing tools that are available in your price range.
For more on this and other topics visit www.yourfloridabusinessbroker.com