09 Apr Today’s Business Listing Web Sites
In a recent web site posting (I believe it was on Linked In) the subject was raised about BizBuySell soliciting For Sale by Owner ads. There was quite a discussion on this – almost all negative. There was a lot of concern about BizBuySell going after business owners who want to sell, thus perhaps influencing sellers to try to sell their business on their own and not through a business broker.
Please hear me out to the end of this article, even after I tell you that I disagree with the concern. For many, many years, the best method of advertising businesses for sale was the newspaper. In fact, it was the only one available to business brokers. My active business brokerage days were in Southern California and we advertised in the Los Angeles Times and what is now the Orange County Register. If the ads were done well, the phone calls came in and deals were made. And, related to the concern about BizBuySell soliciting to owners, I should add that our ads competed with For Sale by Owner ads also in those days.
In 1978, our offices were budgeted for approximately $1,200 per month for advertising. Using an Inflation Calculator, that would amount today to approximately $4,300 per month. It seems to me that BizBuySell is a real bargain dollar-wise. I realize that most brokers use more than one site. But add up your monthly cost to advertise today and compare it to $4,300 a month.
Our ads in the newspapers averaged approximately 160 buyer calls a month per office (we had 45 offices in 10 states at that time) and approximately 60 buyers came into the office as a result of the ads and phone inquiries. Our offices averaged 21 listings per office including new offices. The offices averaged $74,000 per month in commissions, again using the Inflation Calculator. That includes a few new offices also. This is not to relive the “old days,” but to point out that all of this came from newspaper advertising that also cost a lot of money and included For Sale By Owner listings. I am aware that the economy for the past four years has been awful – certainly impacting our business.
This is not a defense of BizBuySell, but an effort to point out that today’s listing web sites are a real bargain. For a lot less money than newspaper ads, today’s business brokers reach buyers all over the world and offices can place all of their listings on these sites. These Web sites do solicit For Sale by Owner ads as they are certainly more profitable than the rates they charge business brokers. The LA Times also solicited them and these ads were as prevalent in the Business Opportunity section as those from brokers.
I have no problem with business brokers creating their own listing web site, but I doubt that enough money could be raised to offer a site that could compete with the existing sites. These sites don’t exist just to serve the business brokerage industry. Certainly they want their business and will do all they can to serve it well. However, they are also in business to make a profit.
For some thoughts on how to make the ads on the listing web sites bring in more buyers, stay tuned for our next blog posting on Thursday. And, as always, we’d like to know your thoughts. Please feel free to comment.