Though we try very hard to answer all inquiries in a timely manner, the number-one complaint I hear from buyers is that many brokers don’t respond to their inquiries.
With at least ten buyers for every seller and very few really good businesses available, most brokers are inundated with buyer inquiries. Unless YOU provide information to separate yourself from the rest of the pack, you won’t make much progress.
The biggest mistake buyers make is to email an inquiry for a listing of interest and state something like: “Please send more info.” That email is going right to the delete folder – guaranteed!
The best one I ever received was: “Please send me three years’ tax returns, all financials and the address for this company.” While that is an extreme example, no broker/seller is going to provide you with any meaningful data until they know (i) who you are, (ii) if you’re qualified, and (iii) you have executed the appropriate non-disclosure documents or other forms they may require.
Your emails and calls are your “sales pitch”.
You must convey three things to a broker or seller:
You are serious
You have a “need” to buy (they are not interested in more lookers)
You have the means to complete a deal
From now on, when you contact a broker or seller online, or by phone, your comments should strictly be: “I am interested in this listing. I am ready to buy a business immediately. Please send me the necessary non-disclosure forms and any other documents you may require so I can get additional information.”
With every email, include your full name, phone number and email address.
I believe it’s a great idea to also call them – especially if you get an auto-response to an email inquiry. Repeat your introduction and let them know that you have also emailed them. If a broker gets two contacts from you, any decent one will put you at the top of their list.
Write down the listing number, a brief description of it and where you found it. You may have a few prospective businesses on the go and you want to have the information handy.
When they send you the forms, complete and return them immediately.
If you do not hear back within two days of any inquiry, contact them again.
The lesson here is simple: Take control of the process. Distinguish yourself from all the “tire-kickers”. Unfortunately, you may meet some uncooperative brokers. Chase them down – get the information you need. They want to sell their listings, but they must spend their time with buyers, not lookers. Follow these steps and you will make an impact.
A view of Wall Street from the steps of Federal Hall in lower Manhattan.
For YAHOO NEWS By Peter Coy Peter Coy – Fri Feb 20, 8:08 am ET
Look out, New York. Washington is gaining on you.
As the nation’s most populous metro area feels Wall Street’s pain, the fourth-largest — Washington — is barely sensing the recession. In fact, Moody’s Economy.com estimates that metro Washington’s economy will actually grow 2.5% from mid-2008 through mid-2010. New York’s economy is expected to shrink 4.2%.
It wouldn’t be the first time that Washington benefited from a national crisis. Back in 1930 the District of Columbia was a quiet Southern town, scoffed at by New York sophisticates. But as the federal government ramped up to fight first the Great Depression and then World War II, its population grew 65% in two decades, vs. just 14% for New York City.
This time Washington is getting a boost from government spending to fight the recession and fix the financial system, as well as the ongoing expenses of fighting wars in Iraq and Afghanistan and promoting homeland security. While President Barack Obama pointedly left Washington for Denver to sign the $787 billion stimulus package on Feb. 17, locals expect the metro area to garner a big share of the dollars.
Where Home Sales Rise
“Oversight alone will (mean) tons of new jobs,” enthuses Jill Landsman, a spokeswoman for the Northern Virginia Assn. of Realtors, who says the pace of home sales has picked up over the past year even as prices have continued to fall.
Job-seeking Wall Streeters who jump on Amtrak’s Acela to Washington may be dismayed to find that the maximum pay for an FDIC bank review examiner is close to $180,000. That’s great for most folks, but paltry next to the bonus-swelled compensation many bankers are used to. The pay can be a lot better, though, at the Beltway Bandit consulting firms that are ramping up to assist the FDIC, Treasury Dept., and others. Consulting jobs for senior specialists in finance “can pay north of $200 an hour,” says Andrew Reina, a practice director for risk consultant Ajilon Solutions.
Companies such as Computer Sciences Corp. (NYSE:CSC – News), Science Applications International Corp., or SAIC (NYSE:SAI – News), and Booz Allen Hamilton employ tens of thousands of people in the Washington area and continue to expand. Even before the current crisis, professional and business services, which include private-sector lawyers, accountants, engineers, and consultants, made up 21% of metro Washington’s annual economic output, even more than the 20% made up by government itself, according to a BusinessWeek estimate based on government data. The financial crisis “creates opportunities for companies like ours” to provide expert assistance, says David Booth, Computer Sciences Corp.’s president of global sales and marketing.
The New Talent Magnet
By at least one measure, it’s Washington rather than New York that’s attracting the best and brightest these days: According to George Mason University’s Center for Regional Analysis, metro Washington leads the nation in the share of jobs that are in high-tech and the share of workers with advanced degrees.
As for New York, the mix — and the outlook — is bleak. Finance typically accounts for 32% of the metro region’s output, mostly because finance jobs pay so well. But pay limits, combined with job cuts, will harm everything from condos to car dealerships. New York State Labor Dept. analyst James Brown says, “There will still be a need for capital-raising, but it’s pretty clear the sector won’t be as profitable or as large.”
Adds Moody’s Economy.com economist Marisa Di Natale: “New York, we think, is going to have a pretty severe recession.”
Staging a Comeback?
In one measure of how dire things have gotten for New York’s finance sector, Mayor Michael Bloomberg on Feb. 18 announced a $45 million plan to retrain investment bankers, traders, and others who have lost jobs on Wall Street. The money will also provide startup money and office space for new businesses by the former Wall Streeters. According to The New York Times, city officials expect New York to lose 65,000 jobs in finance during this recession, and not gain them back any time soon.
“We say good luck to the people in New York. We know they’re going through some tough times,” says Arnold Punaro, general manager of SAIC’s Washington operations.
Then again, there is one resource that New York has in abundance, and that’s self-confidence. Regional Plan Assn. President Robert Yaro, whose nonprofit organization coordinates planning in a 31-county area, says New York has been declared dead over and over since the 1880s, but always springs back.
“The fundamental strength,” says Yaro, “is that every 24-year-old in America and the world wants to be here. Because every other place seems kind of sleepy.”
Excerpted from Diomo.com, by permission:
Meeting with sellers is a crucial step in the business buying process. It is so important that you ask good questions. If not, you will waste time, miss out on good opportunities, or overlook a critical aspect of the business that can haunt you later.
Keep in mind that sellers may have very rehearsed answers and so you need to mix up your questions, take great notes, and look for any hesitation when they reply.
If the seller has an intermediary, (broker), present, your questions and conversations should be directed towards the seller – he/she needs to own the answers to your questions.
There are at least 36 key questions you must ask every seller. Here are a few of them:
• Provide me with an overview of the company from the day you started until today – what have been the successes and failures?
• What do you do everyday?
• Do you anticipate any problems with me getting credit from your suppliers
• Do any of your customers or suppliers represent more than 10% of your business? If yes, who are they?
• Why are you selling?
• What is it that you like best and least about the business?
• How did you arrive at your asking price?
• If you get hit by a cement truck today, who would run the business tomorrow?
• Do your employees know the business is for sale?
• What is the ideal profile of the ideal buyer for this business?
• What can be done to build the business?
• How long will it take me to really learn this business?
• How long can I count on you to train me after the sale?
• What keeps you up at night about the business?
• What are the details of the lease? How long? Any options? Do you anticipate any problems with the landlord assigning it to me or entering into a new lease?
• How much vacation do you take (not that you’re looking for time off…rather, you want to know if they have adequate staff that will allow you time away)
• Are you the only owner?
• Who are the key employees? Any manager in place? Are there any employees that are critical to the business?
• Are you willing to finance part of the purchase? If not, why?
Answers and ResearchYou want to get enough answers and detail to your questions so you can immediately focus on researching the business, the industry, the competition, etc. Although the Internet allows prospective business buyers to do phenomenal research and quickly, in today’s environment, good businesses sell fast – very fast. As such, you may not have a lot of time between a seller meeting and preparing an offer. Obviously, you’ll want to do your homework before moving to an offer so be sure to get enough information in your seller meeting to conduct your research. On this note, always ask the seller if he/she has copies of any trade publications. They’re a great source for additional information.
Seeing Yourself in The BusinessIf you take away anything from a seller meeting, it should be the answer to these four questions:
1. Do I like the business?
2. Can I see myself running it?
3. Do I like the seller?
4. Do I trust them?
Questions 1 and 2 are obvious. Questions 3 and 4 are critical. If you like the seller and trust them, chances are you and they will be able to work through any and all of the deal challenges that will arise. Trust is also paramount. If not, you will always keep thinking they are hiding something.
Impress The SellerIf you have any chance of getting the seller to finance the deal, or bend more they would normally on the deal terms, you need to leave them feeling that “you’re the one” to buy their business. If they believe that you can not only get the deal done, but also run the business successfully, they will go out of their way to make the deal happen.
So there you have it: a series of key questions to ask the seller, and the key points to focus on as your goal when you meet them. Good luck!
“My name is Keri Zouras and I’ve been in the gas station and convenience store business for over 20 years. In that time I’ve bought and sold many gas stations and convenience stores. I met Jim King several years ago and now Jim handles all my transactions in buying and selling. He closes quickly, gets me the price I want and helps me to move on to my next project… He does a great job, its smooth, its seamless, you’re in great hands with Jim King and I highly recommend him, he’s awesome and we just love him.” Author: Keri Zouras-The Z Group Inc., Clarksville, MD.
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