The Challenge in Finding Good Businesses for Sale

As a business buyer, it may seem extremely challenging to find good & profitable businesses for sale. The business re-sale marketplace is not as liquid or robust as the MLS system for selling real estate and this can be frustrating. Below is a summary of why it may be difficult to find a good business for sale in the Toronto, Ontario region and what you can do to increase your chances of finding one.

The business resale market is competitive
The ratio of the number of good businesses for sale to the number of people looking to buy does not coincide with the real estate marketplace. There are simply many more buyers than there are profitable businesses for sale. The key point to remember is that although there may appear to be many business listings online, many of these businesses are not as profitable as they appear to be or have declining sales, profitability or may be mispriced.
Buying a business should almost be approached as a part-time job. If you are looking online, you must sift through the business listings and talk to several sellers before you find a good business to buy.

There is no central clearinghouse for selling a business
The MLS system in Canada is the ‘clearinghouse' for buying & selling real estate through a realtor. Although there are some businesses listed for sale on the MLS, most are not. The reason for this is that a business broker will typically take on a business seller as an exclusive listing. This means that the agent will work to find the buyer for the company themselves and usually represent both parties in the transaction. The implication for the potential buyer is that there is not central place to go to find a business. So, a person must scour the internet for business listings and talk to several business brokerages to view their exclusive business listings.

Private sellers are usually unqualified to sell a business
Selling a business is a task that typically requires a unique skill set to do it successfully. A good business broker, as an example, will have a background in business valuation, financial analysis, marketing, sale and negotiation. They have usually honed their skills over several deals. A person selling a business privately will lack the network and advertising reach to find a buyer. Many times they also do not price the listing correctly and this results in very few buyers being interested in the business.

Business brokers who are unresponsive
It is a common complaint that some business brokers simply do not return phone calls or emails promptly. It is a common complaint that some business brokerage professionals are sometimes guilty of - it is absolutely inexcusable though.

If you are serious about finding a good and profitable business for sale
in the Toronto region you must realize that it is a process that may take some time. Be prepared for a search that can last for a few months. Search the online listings and be tenacious in contacting the business brokers to ensure you get the information you're looking for.