After 10 years of practice and literally thousands of contacts from potential buyers I took a moment to ponder a amazing statistic. As mentioned in an article I was interviewed for last October in Slate Magazine ( http://www.slate.com/articles/business/buy_a_small_business/2014/10/small_business_brokers_how_to_buy_a_small_business.html ) I receive on average over 50 email contacts an evening on businesses. Statistically less than 10% of contacts will ever make a purchase of a business and at the root of that is a lack of education about the realities of the process. So in the next couple of blogs I will attempt to orient the reader on the process here in Florida and some terminology you will discover used by business brokers in the Area
Florida unlike most states has a vibrant business broker community that actively encouraged Co – Brokering of deals. That may shock you but in almost all the other areas of the world co-brokering is not common. The theory here is that competition is good for the seller and a active co-brokering model improves the market place and the percent of sales consummated. The counter to that is a theory that not co-brokering allows brokers to singularly focus on their seller and seller alone. I will leave it to the reader to decide which model makes more sense.
The Trade association here is the Business Brokers of Florida. They run a multiple listing service which carry’s all the listings for all the brokers. You can access it direct from their site or from a linkback from my webpage www.businesses4saleorlando.com .
This MLS system carries upwards of 3000 listings. If you access from the BBF site you will be contacting the listing broker individually. If you contact from www.businesses4saleorlando.com your inquiry will go to me. My point here is that when buying a business you should interview several professionals and engage them. Show them loyalty. If you get known as a buyer working several brokers you will quickly get kicked to the curb as a disloyal buyer. Remember, buying agents earn money only from a sale….your behavior if construed as disingenuous will result in a lack of access in short order.
Once you have engaged a broker and begin your search you will start looking for businesses. Your broker will ask you to sign a confidentiality and non disclosure document for EACH LISTING YOU WISH TO INQUIRE ON .The document must be complete, one form does not work for all listings, and your broker can not complete it for you. Show diligence in this. This document ties you to the broker for the deal in question as procuring cause….no broker owns a buyer. This form is a legal form so if you have questions always seek legal counsel.
Buying a business is a process and is something to be taken seriously. Remember the fact that 90% of buyers never do anything. This lumps you in a group that right or wrong wastes sellers and brokers time. Act sincerely and respect others and you are on your way to moving through the buying process.