It never hurts to ask: How to buy a business that’s not for sale
If you want things to happen, make them happen.
I can’t think of a saying that better captures the spirit of buying a business.
And here’s why.
Consider that not every business is listed for sale at the very same time. Along similar lines, the specific business you might be interested in might not be for sale at all. The motivation to sell and the timing, for that matter, differs so greatly among business owners.
The nature of the process is unpredictable, but with a little creative thinking and perspective, you can achieve your goal of business ownership as, sometimes, the best opportunities come from the most unexpected of places.
Being part of hundreds of creative deals and transactions over the years, we’re sharing some of our insights and inspired ideas to help you take the next step.
Target the business you want.
Research and profile the business you’re interested in. Years in business, number of employees, competitors, industry trends or challenges, customers and brand or market reputation; and so forth. Gather as much helpful data and information you can to understand the opportunity, challenges, weaknesses and strengths of the company.
Alternatively, create a list of businesses you might want to pursue if it’s too early for the above details.
Reach out to the business owner and pitch yourself when the time is right.
Make contact with the business owner and schedule a time to meet in-person for coffee or lunch after sharing your genuine interest in his or her company, as well as desire to possibly purchase it. Use this time to better get to know the owner on a personal level, specifically to see if you share the same vision, goals and ideas for the company.
Create a business plan.
Something to keep in your back pocket until the time is right—create a business plan focused on positively elevating the existing foundation of the business. For example, you might discuss the benefits and potential of breaking into a new market or targeting new industries to grow the business. Avoid highlighting significant changes as this might deter the owner from furthering a discussion around a sale if they sense a new owner might break down the company they built from scratch. Tread carefully and respectfully.
Get yourself a solid acquisition team.
Round up the right players to make the deal happen. You’ll need:
- A credible and knowledgeable business broker with a solid and proven track record of successful transactions. Expertise in and with the particular business you’re interested in is also a positive.
- A highly-recommended attorney that specializes in business transactions.
- An experienced accountant that can review the business’ financials for the last five years.
- If any financing is part of the deal, start discussions with your local bank for a conventional loan or if a Small Business Association Loan is the need, you can research top banks that offer this type of loan support. Your broker might also have recommendations to share with you based on past customers and experience, good or bad.
Conduct a business valuation to validate the price of the business so you can make an offer.
Your business broker will tell you a business valuation is the first, most important step to ensure you’re offering an accurate price for the business. In other words, the true and accurate market value and worth of the business.
We can share our experiences, answer questions and provide insights to help you on the buy / sell journey. Reach out to our broker team at 262-347-2083 or visit lakesbusinessgroup.com to learn more.