What Sells?

What Sells?

The following search breakdown by type of business in order of interest (restaurants being first) is based on almost 850,000 searches – only the top 16 are listed. Courtesy: BizBuySell

  1. Restaurants
  2. Gas Stations
  3. Convenience Stores
  4. Liquor Stores
  5. Bars/Taverns
  6. Drycleaning/Laundries
  7. Hotels & Other Lodging Places
  8. Other Eating & Drinking Places
  9. Beauty Salons, Barber Shops
  10. Auto Repair, Parts & Services
  11. Internet Businesses
  12. Health, Medical & Dental
  13. Manufacturing
  14. Retailing Businesses
  15. Supermarkets
  16. Vending Machines

Searching through our archives, we found a breakdown for one month of what sold for United Business Investments (UBI). The time period is the late 70s.

25%     Miscellaneous Foods

14%     Retail

09%     Markets

09%     Service

08%     Coffee Shops

07%     Beer Taverns

06%     Liquor Stores

06%     Cocktails

06%     Misc

04%     Fast Food

04%     Coin Laundries

02%     Wholesale

In 30 years it doesn’t look like that much has changed. Comparing this information with similar reports over the years, we are convinced that what sells would be similar. Food-related businesses remain at the top of the list. Beer taverns are unique to California, I think. But, if we add them to cocktails, it puts bars in 2nd place. With the growth of the franchised fast food and casual food operations, food operations continue to grow. Bars are one area that so far have not been franchised except for the casual food and actual restaurant franchises.

The point of all this is to suggest that you improve your chances of selling a business if you are building an inventory of what people seem to want to buy. If you list five fast food businesses for sale, your chances of selling one are much better than if you have five different businesses for sale. You have to play the percentages. It doesn’t mean that you shouldn’t list that “different” business assuming it really is a good business.

Here are my rules for success in business brokerage for beginners:

  •  Don’t list a business for more than $500,000 (and preferably less) for the first six months.
  •  Make sure the seller will carry the balance with an approximate down payment of 40 percent of the full purchase price.
  •  Understand that your buyer is most likely buying a business for the first time.
  •  The vast majority of your sales initially will be located within about a half hours drive of your office.
  •  The vast majority of your buyers will have less than $100,000 in cash for a down payment.
  •  The vast majority of your buyers want to make a living, but are also buying independence and  freedom, and they have a desire to be their own boss.