BUYING A BUSINESS

Dec 11, 2021

5 Ways to Find Businesses for Sale

There are lots of reasons why small business owners might consider selling their businesses.. The owners could have new opportunities they can’t pass up. It could be that the owner wants to retire, or they’ve had poor health. In some cases, it could be something as simple as sheer boredom. Or, they just want to write themselves out of their current business category.  

Whatever their reason for selling the small business, it could be a great opportunity for you if you just know where to find an established business for sale. It could be that you’ll get lucky and see a “For Sale” sign in the window of a small business that’s perfect for you.

While possible, that scenario is highly unlikely. You’ll probably need to rely on a few more creative ways to determine where to find the right businesses for sale.  

How to Find Businesses for Sale

You may have a vague idea of what your buying strategy will be, or you may be considering the option of sourcing and contacting each small business on a one-by-one basis. If you’ve put any time into trying to figure out ways to find a small business for sale, you know that it can be a time-consuming and frustrating process. Business buyers are not always successful, but these tips should give you the edge you need. 

1. Search Online “For Sale” Directories  

The easiest way to find a viable business that’s for sale is to search for online options. The most obvious place to search is via Business Listing Sites. You may not be able to get all the information you need from these listings, but you can do the research from your computer.  

Depending on the Business Listing Site, you may find varying degrees of details, including the history of the business (when it was founded) and the gross revenue. You may even find inventory value and asking price, depending on the type of business that you’re looking to purchase and the available cash flow.  

2. Use a Small Business Database

One perk of Beacon’s Buyer Program is access to a database of over 5 million small businesses in the United States. You can use this database in your outreach efforts - use our search functionality to find the kinds of businesses you might be interested in buying, and then reach out to the owner to find out if they might be willing to sell.

You can also consider buying this kind of data from data providers like Data Axle or Dun & Bradstreet.

3. Contact or Hire a Business Broker 

A business broker can offer services that are akin to that of a real estate agent. They tend to have access to a database that lists businesses for sale. They have a network of relationships that give them access to deals. They can help you find listings like what you’re looking for, including the type of business, general cost range, location, and other features.  

When you hire a business broker, you’ll be paying another person to find you a business. Beyond the fees, there could be concerns about whether it’s in their best interests to find you an established business that will meet your needs. Here’s a quick overview of the pros and cons of using a broker to find you an established business.  

Cons or Disadvantages 

While it would be nice if you could assume that a business broker has your best interests in mind, that’s not necessarily the case. Here are some cons or disadvantages you should consider: 

• A broker (usually) represents the seller.

   Unless you hire a buyer-focused broker, it’s in their best interest to make sure that the seller is satisfied with the process. That’s not to say that they won’t help you. They probably will, but you should keep in mind what their primary focus will be.  

• A broker may charge 5-10%.

   That’s not an insignificant cost, which will increase the overall price you’ll pay for the business. Broker fees may inspire the seller to consider selling the business without a broker’s help, as long as they don’t enter into an exclusive contract with a broker first.  

• A broker could be incompetent.

  Not all business brokers are competent or even honest. Buying a business is not an area that’s currently highly regulated.

So, you could get lucky and find a broker who will work tirelessly on your behalf to find you just the right business.  

You could also find a broker who is unscrupulous, dishonest, and is just out to make a quick sale no matter how it might affect your long-term chances of success.  

Pros or Advantages 

There are lots of reasons you might be considering a business broker to help you in finding your new business. Here are just a few of the key benefits.  

• A broker could help you find a valuable business.

  They often have a wide range of knowledge and a background in business, which allows them to accurately evaluate the value of a business. The broker could be an invaluable partner in finding a business that perfectly fits your preferences and requirements.  

• A broker should respect your confidentiality.

  A business broker may be the best person to help you buy a business and keep your exploration confidential from competitors, suppliers, or other business interests that could use your interest to your detriment.  

• A broker can negotiate on your behalf.

  Every situation is a bit different, but a business broker can act as your intermediary as you move forward in the buying process. They could serve as your chief negotiator to help you work out the details of the deal with the seller.   

• A broker may be experienced.

  A business broker should have experience in these types of transactions. That means that they will be ideally suited to offer advice and insight on the process. They can save you time and effort in a trial-and-error process of finding a serious seller.  

While the pros can outweigh the cons, you should still carefully consider your options before moving forward with a business broker.  

4. Tap into Career Development Centers and Local Business Associations

As you search for a business you can buy, you can also try tapping into Career Development Centers or local business associations. It could be that small business owners have reached out to these groups for assistance in business development efforts, after experiencing particularly difficult times. These groups are often in contact with many businesses in the community.  

They may know of business owners who are trying to sell their current business to explore other business opportunities. They may also know about those owners who are planning to retire, or who are in danger of losing or going out of business for other reasons.  

5. Contact Local Businesses

Driving around neighborhoods is one way to physically scope out some businesses that might be for sale. In fact, it’s possible you could find a business that's advertising the fact that they are going out of business. It could even be something as simple as a “For Sale” sign in their front window. From there, you’d contact the seller, and determine if the business is the right fit for you.  

While finding the “For Sale” sign is probably a long-shot, you could try a few other popular options for finding a local business that meets your needs.  

• Make a list of local businesses you’d love to buy.

  Then, contact each one to see if they are looking to sell.  

• Pitch your competitor.

  This could be a situation where you already own a small business and just want to expand it into another area. You can reach out to competitors to gauge their interest.  

• Reach out to your personal and business network.

  You might be surprised by how much information your personal and professional connections can provide. They may know about those owners who are retiring, going out of business, and/or just looking to sell.  

• Check the online advertisements.

  You might be familiar with the traditional classifieds. You can still do that, but you can also check and post your interest in buying an established business via the online classified posting sites as well.  

Next Step: Sign Up For Beacon Buyer Alerts

Beacon offers a customized alerting service to inform you when businesses that meet your criteria come available for sale. And then you can engage the buying process with Beacon. Sign up here:

John McCleary

Transaction Advisor

Information posted on this page is not intended to be, and should not be construed as tax, legal, investment or accounting advice. You should consult your own tax, legal, investment and accounting advisors before engaging in any transaction.