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Frequently Asked Questions by Buyers
What would it cost me to buy a business listed here ?
Who sells a thriving business ?
Who actually lists these businesses ? (pending)
I need more information before I contact the seller. (pending)
What happens when I send off a response to the seller ? (pending)
The seller has not responded - What happens next ? (pending)
What would it cost me to buy a business listed here.....
Are there any hidden costs ?
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You would be paying the price listed or the eventual price negotiated between yourself and the seller. Biz.for.Sale operates as an advertising and informational service and would receive a small commission from the seller (not yourself) as an introduction fee should you conclude a sale. No costs in this regard would ever be for the buyer.
Who would want to sell a thriving business...
Are businesses for sale not usually in trouble ?
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Yes . . . . . . . and No ! Some are, some aren't. Businesses exist in dynamic environments, they are always either on the up, or going down. The seller is stating the present financial and trading circumstances to the buyer. Before buying, one would go through the process of due diligence which would be where you ensure (or rather your appointed accountant or financial professional does) that the business is making the profit it claims, prove the customers and debtors, value the assets stated, etc. For the buyer, this is a very important process and it should be undertaken by a specialist experienced in these matters. In this process you confirm that what is, actually is......
The real risk for the buyer can be in that the present owner suspects that market conditions are about to change. Perhaps a threatening competitor is about to enter the same market, maybe a major customer is about to close or switch to a different supplier or product, or maybe the firm's product technology is becoming obsolete. There could be lease problems or maybe key employees are planning to leave. Could a technology license be expiring? Is the business needing a huge capital hungry refurbishment? Are there legislative and political threats ahead ..... in the South African context the requirements for Labour Law (Equity Bill) and public procurement (BEE) could pose threats for a smaller business. Maybe these are standard business risks, but the present owner could see them as huge and threatening and maybe just not want to go there. Part of the buyer's research would be to try and determine the real existance and extent of such problems. Some attempt to establish these issues could be made in the due diligence process.
But if a business is profitable, why would someone want to sell it ?
The most common reasons for selling that we see stated are:
- owner emigrating
- ill health of owner
- partners splitting up
- lack of investment capital
- skills set mismatch
- owner wishes to retire
- owner has other business interests to pursue
or "not enough time for this one"
And a very common reason (especially in hospitality with pubs and restaurants) is that people claim to be "dog tired". They would make a statement such as "I've worked sixteen hours a day, six hours a week for four years to build this up and now I just want to do nothing for a year". You can almost understand that......
What you might need to ask yourself is: "What synergy can I naturally bring to this business that will make it more profitable and will lessen whatever risks and negative issues that the seller experiences?" And then work out whether you are realistic in your answer.
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