05 Feb A Few More Reasons to Know What Sells
Last month we posted “Know What Sells” which demonstrated the high percentage of sales that have fallen in the food & drink, retail and service business categories from 1990 to 2014. The percentages ranged from 67% to 92% of all sales according to various surveys.
The purpose of that article was to help the new business broker have some idea of what buyers are looking for. There is no point (or not much of one) to work on selling businesses that don’t have buyers looking for them. We are not including business brokers who are specializing in a business type.
We wanted to cover just a couple of additional reasons it is helpful to focus on the businesses that sale.
1. Less time between the new broker starting and his or her first sale.
We want new brokers to make their first sale way before the 7.1 months reported as the average time to first sale for a new broker per our 2014 Survey. Anyone in the industry (or for that matter, anyone who has started their own business) knows the stress of starting from scratch and waiting to see some sign of success and income.
In the “old days,” if a new agent did not make a sale within 90 days, we had to have a heart to heart talk asking them to question if they were cut out for business brokerage. We spent a lot of time working with new brokers so we knew exactly what was going on. We would evaluate the following along with many other similar questions:
- Had they acquired enough listings?
- Did they spend sufficient time with buyers?
- Did they continue to service their listings?
We very seldom hired a new agent who could go 7 months without any income. We wanted the “hungry” ones. However, by letting new brokers know what sells, we can help “speed-up” their time between starting and their first sale.
2. More potential buyers will be attracted.
Having sufficient businesses in the categories that sell also draws in more potential buyers, including those who may ultimately buy something else. The interesting thing is that many potential buyers initiate their search looking for the common type businesses, but the smart broker will pry a bit to see if their interest might really be for a different type of business. It never hurts to ask a few questions or ask the buyer – Mr. Buyer we have a wonderful mail boxes/package type store that really does well. Would it interest you?
3. Helping new brokers focus on core businesses also reminds the “old-timers” what to work on when listing businesses.
Whether you are a new broker or a veteran, look over your own inventory of businesses and consider how your percentages match the types of businesses that sell. Look at your own percentages of businesses that sold to see how they compare to the percentages in the surveys. Discrepancies could show either your lack of enough core businesses or a specialty focus you bring to your business and your clients.