Summary  Looking for a GOOD business to Buy? Watch this video on How to Find a GOOD business on BizBuySell - A Step by Step Process Check out this video for tips on how to find the RIGHT businesses for sale on BizBuySell. We'll walk you through the process of finding and evaluating businesses, so you can find the perfect one for you. The question for you is - would it be a good business for you? Do you like the business? Could you see yourself working in and working on this business for eight, ten, twelve hours per day; six or seven days per week? Would you be proud to say that you owned this business? Do you see the potential of yourself buying and growing this business? If you do not like the business - the numbers do not matter. The most important thing is to find a business that you like and feel that you can manage and grow. Remember, any business that has been there three years or longer and is currently making someone a living could make you a living too. “How much can I make?” start with “How much is the present owner making now?” Focus on businesses that you like and that interest you. And, just as you would look at a menu in a restaurant and out of the many selections available, all of which you could order, you narrow your possible choices to a few things.

Criteria is:
Making over $1,000,000
Top Line SDE is $10k to $25k per month
Geographically within 50 miles
Service based businesses
5 Years or older Profitable SOMETHING I LIKE TO DO

Takeaways

BizBuySell is the largest online broker for business sales.
Self-evaluation is crucial before buying a business.
Choose a business you enjoy and can manage.
Focus on the present owner's earnings when evaluating a business.
A profitable business is essential for acquisition.
The acquisition process involves several key steps.
Use a CRM to manage potential business acquisitions.
Narrow down your business choices to a specific niche.
Understanding cash flow and SDE is vital.
Building a relationship with brokers can facilitate acquisitions.

Transcript:

Jon Stoddard (00:00.236)
Welcome to how to acquire a business on BizBuySell. So BizBuySell is by far the largest online broker out there. They've done 100,000 sales. They've got 65,000 businesses listed annually. And they get 15 million monthly views. So almost every broker out there, if they want to sell their business that they found locally,

They put it on BizBiz. Before you go on there, there are some questions you should ask of yourself. So we're going to start looking at these questions. You need to ask yourself, is this a good business for you? Do you like doing the business? Could you see yourself working in and on the business for let's say 8, 10, 12 hours per day, 6, 7 days per week for 6 to 12 months because

Most of these business are not absentee owners. You're going to get involved in the business until you get the revenue up where you can afford somebody to come in, take the number two spot to number one so you can work above the business. You have to set your expectations there. Would you be proud to say that you own the business? If you're at a party and say, you know, what you do and it's kind of, it doesn't come out of you naturally, probably don't want to do the business. Do you see?

the potential of yourself buying and growing the business? you know what makes the bell ring and say, hey, I can make that bell ring more because I have the skills and experience to do that? You need to ask that of yourself. If you don't like the business, the numbers don't matter. I mean, this business could be 1.5 million, top line, 500,000 SDE, absentee.

But if you don't like doing it, doesn't matter. The most important thing is to find a business that you like and feel that you can manage. Remember, any business that's been there for three years or five years or more, I like business five years or more, is currently making someone a living. Yesterday make a living for you tomorrow.

Jon Stoddard (02:12.302)
And that's the number one question people always ask, like, well, how much can I make with this business? They're always looking at that cash flow number or the SD number. You should actually ask this question, how much is the present owner making now? And when you find that, focus on the business that you like and interest you. It's just like a restaurant with a menu you can order, but you need to narrow your choices down to a niche, what you like to do.

Let me give you an example of a criteria. The business is making over 1 million top line. SDE, Seller Discretion Earnings, is 10K to 25K per month. It's geographically within 50 miles. I don't want to be traveling 50, 75, 100 miles to go see the business. It's a service-based business. Let's say it's an accounting firm. That would be cool. It's five years or older, and it's profitable.

I'm not going to buy a non-profitable business. You'll see those listed or they won't show that they're profitable. I just don't want to buy any garbage businesses and have to fix it. You're going to spend a ton of time and hours trying to do that. Here's the process. We start at BizBuySell. Then we see something we like and we contact the broker. They're going to send us a non-disclosure agreement. We're going to sign that, send it back.

Then they're going to send a SIM, which is a confidential information memorandum. It's a marketing document, but it has financials just like a snapshot of them. We say we like it. We meet with the broker. We ask them a few more questions, and we have some interest. They may ask us for a buyer profile, which may be a simple personal financial statement, talking about if we have the wherewithal to purchase the business.

Then he's going to set up, he or she, the broker, is going to set up a meeting with the seller. And we're going to ask him a ton of questions about the business. Why he started it? Why he sold it? What's this? What's that? We're trying to uncover as much as possible so we can either pass on it, or we see it's a risk. And how do we mitigate that risk? If we like it, we go to the next stage. We present an offer to the broker. Say if they, hey, will they accept this?

Jon Stoddard (04:33.198)
offers accepted by the seller. Then we start the due diligence and we finalize the financing lease and we fund and close. So that's the process. Now what I'd like to do right now is go over to BizBuySell and look for a sample business. All right, so we're at BizBuySell. We're going to type in Tucson and click that and then we're going to search.

But we're going to do a price range of $500,000 to a max price range of $3 million. And we're going to apply. then we're going to do more filters. We can do more filters if we want. But let's just listing types. And we just want to look at it. General contractor, cash flow.

It's doing top line 1.5 million cash flows, 150,000. I don't want a bar, a depot bar or a lounge. It's just not getting in the restaurant business. But here's a brick pavers landscape installation company for sale. $1.9 million cash flows, 631,000. We need to verify that. Is cash flow just the cash flow as far as accounting? Or is it actually SDE? You have to make sure your definition is the same as their definitions.

So we look into this and we see the broker is John Oberg and not more information beyond that except employees are 23. There is fixtures and equipment coming with it, $450,000. I don't see anything about real estate, reason for selling retirement. It's a business I want to check out. So I'm going to send him a message, contact me back, assign the NDA, and then we start it.

What you want to do is drop it into a CRM template. I provide this free at Dealflow system. Or you could use HubSpot, but you just drop it in here in the name and you just put it through a funnel and stages of the process. So that's the process on how to acquire a business on Biz by Sell. Now I want to let you watch this video from Mike Loftus who has acquired three landscaping companies, a couple of them from Biz by Sell.

Jon Stoddard (06:52.45)
Here you go. Thanks for watching. So you, all those three companies you looked at a biz by cell you bought. So, two of them were biz by cell. The third one was biz by cell, but the broker reached out to me. So what I did, the broker was selling a big property management company for a family. And one of the sons also had a landscape business who he is selling as well. But it was kind of like a, like a small thing that he had to sell for them.

He normally sells this bigger stuff, right? And he's just like, all right, like we're gonna find like, he's like, finds me. He's like, let's come meet, let's see, see if it's a good match. And he was just like a noble, no bullshit, no nonsense. Like, Hey, this is a price, you know, does it work for you? I'm like, yeah, I think I beat him up like 50 grand or something and made offer. And he's like, that's great. He's like, we're not gonna have to go on it. Let's just get it done.

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