Business Brokers (Houston: for sale, broker, lawyer)

[ap30]

Does anyone know a good small business broker? Also, do you know them because you have done business with them in the past or are they a non-business related contact.

[MNCold]

I'm interested in learning on this as well.

What does a business broker do in small business envirnonment? Do they also have buyer side broker and seller side broker?

[mtgmike]

Ive been looking at businesses for about three years, some with, some without a broker. They generally represent the seller, and its up to you to do your due diligence, or hire an advisor to help with that. I will say they tend to be more upfront with info than say, a sellers relator when buying a home.

Bizbuysell is the biggest site for listings. Most brokers list there. Sunbelt and Certified Business Brokers seem to be the big guys in Houston.


It is very difficult to buy an existing business. Most sellers are emotionally attached to the business, and want a number(for emotional reasons). From my experience, If you financed most of these with fantastic financing, there is very little left over to live on...for ten or twenty years! You shouldnt get into a business unless you plan to grow it, but If I cant get a return on my money, im better off starting new.

Its a tough process. Let me give you a "hypothetical".

We agreed on a price after six months of negotiating. .I wanted to pay half up front, and hold half for a short period of time 30-60-90 days to verify gross sales while I operate.This was a cash business, and I was lead to believe there was more there than could be verified through tax returns. This happens all the time, sometimes the second payout is over a few years. I only wanted to make sure the guy wasnt a complete fraud. No dice.

Ive avoided franchises. I looked at a few, but the returns were for the most part pathetic. They seem to want to get empty nesters to pay for a job.

Brokers will operate as buyer's brokers, but most that do, are franchise pushers.

[ap30]

I have been looking at businesses myself but the experience i've had with the seller's brokers has been ridiculous. i have dealt with 4 brokers from Certified Business Brokers and they seem to act like they are doing us a favor by dealing with us. They take their sweet time to respond back and when they do, they show no interest in trying to sell the business to you. It is more like, if you want it, it's there, if not, then oh well. I am surprised these brokers actually get business owners to hire them. I also had a friend who listed his business for sale with the Certified Business brokers and they charged him 20% commission.

Hence, i wanted to see if there were any professional and decent business brokers out there other than these horrible brokers.

[mtgmike]

Well, I don't know, I wasn't there.

But I dont want someone to "sell" me on a business. I just need a facilitator to give me financial statements, and basic info. Past that, you'll probably meet the seller and move it along.

As far as a big commission, I've seen FSBO listings on bizbuysell. Im sure the agents are doing everything they can to actually move the sale. Until then, they dont get paid. Unfortunately, in this environment, you aren't selling anything quick, unless you are giving it away.


***Another idea, brokers deal with dreamers all day, every day. Once I proved I was financially capable, the service got exponentially better.

[MNCold]

mtgmike and ap30 - Great info. I appreciate it.
What type of advisor that would serve as advocate for buyers? Are they lawyers that review the sale transactions? Do you know of a good person (don't know what the title would be ) that would help buyers with purchasing a business.

[mtgmike]

Id search for CPA firms that specialize in that industry. Most handle this kind of work(have helped tax customers buy competitors), and will have specialized knowledge. They will probably have a legal staff for contract review. I dont think a lawyer is your first contact, although any business owner should have a good relationship with one.

The guy that im using has only dealt with me as a favor for my old man, who does a lot of business with him.


***Just another tidbit. Out of the 15-20 businesses I have looked at, exactly ZERO have proven income close to what they originally state in their listings. And Im not talking about legit add-backs, or owner expenses, or even depreciation. Just flat out inflating. Gets frustrating. And its crazy how when they admit the revenue proves to be 80% of original, they never think its justified to lower the price 20%.

[RCH99]

Originally Posted by mtgmike

Out of the 15-20 businesses I have looked at, exactly ZERO have proven income close to what they originally state in their listings.

^... probably why they are for sale.