How You Buy a Business That Isn’t for Sale (Secrets You Should Know)

Up to 80% of profitable businesses sell off-market, which means they are not listed for sale.

Off-market businesses are those businesses where the owner wants to sell, or needs to sell, but they have yet to engage a business broker.

Buying a business that isn’t for sale is known as buying “off-market” and is the best way to buy a business. It’s estimated that up to 80% of businesses sell without being advertise, which means if you just look for businesses online or via business brokers, you will miss out on these opportunities.

According Chelsea Corporate: “The best, most successful firms never get as far as the public market“.

Chelsea Corporate also say “Most company owners prefer to sell privately. They’ll only list their business on the market as a last resort when a private buyer can’t be found. If you restrict yourself only to what’s advertised for sale, you’ll miss out. Plus they said; it’s widely regarded as the best way to buy a business.”

Which means; if you’re just searching online or using business brokers to find a business to buy, you’re missing out on the biggest opportunities to find a business to buy.

What questions are answered in this article:

• Number 1; What I discovered with a Google’s search on how to find out if a businesses is selling.
• Number 2; The seven advantages you gain by seaching for off-market businesses.
• Number 3; How you’ll be disadvantaged if you don’t look for off-market businesses to buy.
• Number 4; The best way to contact the owners of these off-market businesses to find out if they are selling.

Google’s answer to “How to find out if a businesses is selling”

At the time of writing this article and when I searched Google, “how to find out if a business is selling“, Google’s AI suggested answer included the following:

Number one; Search online for businesses for sale on websites like intelligent.co.uk or business-sale.com

Whilst this approach does work, it’s time consuming and if you just do this, you’ll miss out on 80% of businesses you could be buying.

Number two; Look for businesses for sale in trade magazines

This method assumes there are trade magazines for the industry in which you are looking to invest.

But even if there are, I’m not convinced this is where business owners will advertisng their businesses for sale. The reason for this I will explain in a moment, which is a reason I’m all too familiar with, because it was the same reason I had when I was trying to sell my business.

Number three; Check local newspapers for businesses for sale

Local newspapers are not the best place for business owners to sell their business.

In my opinion, you’re unlikely to find a good solid business for sale in a local newspaper, although it’s possible you may find a small cafe business for sale, but I suggest you avoid this type of business altogether.

If you’re serious about buying a business that’s going to siginficantly change your life and make you some serious money, it has to be to buy a million-dollar business, which is what I teach in my course about how to buy a business.

Number four; Use business brokers to help you find a business, perform due diligence, and negotiate

This method does work, as the business I bought was found via a broker.

But it’s not the best way to find businesses based on the how many businesses that sell off-market.

With that said, and if you’re looking to buy a business, what are the advantages of looking for off-market businesses?

What are the advantages of looking for off-market businesses?

If you look for off-market businesses there are more opportunities – 80% more

Firstly, there are more opportunities, as you’ll have access to more businesses where the owners want to sell or need to sell, but haven’t yet contacted a broker.

You save time by looking for off-market businesses

Secondly, you’ll save time, as dealing with brokers and searching online for “on the market deals” is very time-consuming.

I know this, because it took me a long time to find the business I bought, where the mistake I made was to focus my search both online and via business brokers.

In the last year alone, I’ve been involved with two businesses that sold off-market, which were both as a result of the buyer making a direct approach.

Searching for off-market businesses means less competition

Thirdly, there’s no competition from other buyers, as “buying businesses off-market” means competition isn’t an issue, as the business has not yet been advertised for sale.

I learnt the hard way on this one, which I explain in the disadvantages of not buying off-market businesses below.

You will find better deals by searching for off-market deals

Fourthly, you will find better deals, as the some of the best businesses never come to the market.

Plus the businesses will not have been over-valued by a broker, which means the owner’s expectations on valuation are far more realistic.

Selling a business off-market means no broker fees

Fifth, the seller doesn’t have broker fees to pay.

Finding businesses for sale off-market means building rapport from the outset

Sixth, you’ll begin to build rapport with the business owner right from the outset.

In my course on how to buy a business, I explain why rapport-building is key to negitiating a good deal.

Save even more time searching for off-market businesses by avoiding time-wasting business brokers

Seventh, you’ll save even more time, as you’ll avoid the annoying “Gatekeeper” stance that business brokers take when you make first contact with them about a business for sale.

When I was looking for a business to buy, I found that some business brokers acted in such a way that they appeared not to act in the seller’s best interest. On many occasions it was a bit like ‘getting blood out of a stone‘.

Why don’t buy a small cafe business

You maybe wondering why I suggest you don’t buy a cafe business.

This is because a small cafe business will limit your growth potential and if it’s a small high-street cadfe business, you’ll be buying yourself a job. The profits of a small cafe businesses will be relatively small, and may not fulfill your dreams to become financially free.

What are the disadvantages of not looking for off-market businesses to buy?

Most business owners prefer to sell privately and off-market

Firstly, most business owners prefer to sell their businesses privately, which means you’ll miss out on some of the best opportunities there are, when you restrict yourself to searching only those businesses advertised for sale.

Owners only list businesses for sale on the market as a last resort

Secondly, company owners only list their business on the market as a last resort, which is only after they’ve failed to find a private buyer.

The result for you is, you only get to see those businesses that don’t sell privately, and only then, once they’ve been listed.

Which not only adds delays for you, but it also means there’ll be more competition from other buyers too.

I discovered this the hard way…

“I was a week or so away from completing (closing) on a fantastic deal to buy a civil engineering business. I’d agreed to buy this civil engineering business, which at the time was making annual profits of over $600,000.”

“The owner had agreed to accept $600,000 for the business, which was an amazing price. This represented a one-times profit-multiple. Plus, the seller agreed to finance the deal as part seller financing, and part asset financing, which was to be financed on the assets owned by the business!“

“The business had a lot of expensive and unencumbered plant and equipment I arranged asset finance against, and it had a debtors ledger I was able to arrange invoice financing against. Just a week or so from finalising the deal, he accepted a higher “cash offer” from another buyer, which meant…I lost the deal.”

“This happened because the broker contacted the seller with this new offer, as he’d not taken the business sales particluars off their website. Another lesson I learned, was how important it is to act quickly, once a deal has been agreed. This is another reason why bank finance is never a good way to go, as it takes time to arrange. Seller finance is far better, far easier and much quicker to arrange.”

Why do business owners prefer to sell off-market?

The main reason why business owners prefer to sell off-market, is because they fear their employees and/or their competitors will find out. I know this, because I had the same fear when I was selling my business.

How you contact business owners of off-market businesses?

There are many ways in which you can find off-market businesses for sale, which I teach in my course on how to buy a business.

One method I teach to find the off-market deals, is to write good old fashioned letters to the owners of businesses in the sector, or sectors, in which you are looking to buy a business.

When you write your letters to business owners, it’s important that you demonstrate that you have keen interest the their business and the sector in which it operates.

Your letter should also communicate how much you care about preserving the owner’s legacy, as most business owners are very protective over their business and their employees, which may have taken them years to build.

What you are looking for is motivated sellers who want to sell, and in some cases need to sell their businesses, and who will welcome your letter when it lands on their desk.

But before you start your letter writing, you might also like to watch this next video. This video explains how seller financing works, but in simple terms.

Understanding this one technique will be a game-changer for you in your journey to buy a business, as it was for me when I bought my million-dollar business.

I hope this helps you on your journey to finding a business to buy, and if you have any questions on this topic about buying a business, or on any other aspect about the process involved in buying a business, please drop a comment below.

And always remember; no question is a stupid question.

If you don’t know it, you don’t know it, and by having the answer to a question you have, might be all it takes to move to the very next step in your journey to buy a business.