Looking For More Business Deals That Need None of Your Dollars? They Are Out There, Just Ask

Question: How do I start looking for that right business?

Answer: There are two ways. You can shoulder the assignment on your own, developing experience by looking at as many businesses as possible and, by trial and error, discover how to approach the subject of a no-cash transaction with sellers. I'd call this the learn-from-your-mistakes approach; we've all used it from time to time in other areas of our lives. You can start out with the guidance of people who've "been there"...people who'll stand by and support you through the process, helping you cut down the search time dramatically and enabling you to avoid the inevitable and sometimes costly mistakes of flying solo. That's why these program reports are established to assist you in areas where you feel help is most needed. They are intended to aid serious, dedicated entrepreneurs (like yourself) through the search and acquisition process so you don't have to go through it alone.

Profitable extra advantage: Once you learn the no-cash process, you'll have the additional power of being able to "flip" businesses regularly-quickly buying and then selling them for profit, potentially making hundreds of thousands of dollars a year.

Question: Where do I get leads on businesses that might be available for no cash?

Answer: I never rule out traditional sources among the areas to investigate. Your timing could be impeccable and you could find acquisition opportunities in the newspaper classifieds, like the Business section of Thursday's Wall Street Journal. Several other specialized publications have such business listings. The key is to scan for descriptions that indicate an owner's possible motivation to consider a no-cash offer. Do not worry about the quoted price or terms of the business. The sellers are trying to pre-qualify buyers by doing so. If you show that you are serious about buying their business, they will listen to you and your proposal. At that point, you can sell them on your strategy and close the deal efficiently. Make sure to keep in mind that you're dealing with someone who's been in business during the past decade; and your strategy should not be too aggressive. If you are subtle in your offer and make it very appealing to the seller, you'll have a win-win situation.

Question: Can I approach the business suppliers?

Answer: This can be an excellent idea. Suppliers always know who are the sellers in their industry. They will feel an obligation to give their best leads to valued customers, to built good will and assure a strong relationship with you.

Ask people in the trade which suppliers tend to sell to your target industry. Don't forget the follow up. This can be THE most important task to accomplish. Make it a point to call them once a month to remind them that you are still interested in becoming their customer.

Question: Should I approach business brokers? Or do they "jack up" the price of the business to accommodate their commission.

Answer: Rarely does the broker's commission affect how much you pay for the business. Plus, the participation of someone who's motivated to get the business sold is a plus for the negotiation. They will actually help you in getting the deal closed. They will participate in the negotiation and will help you get the best deals. Think of them as real estate broker who wants to sell homes in order to earn commissions. Their job is to unite the buyer and seller to conclude the deal. Keep in mind that it is estimated that more than half of all businesses are sold through brokers meaning that they must not be overlooked as sources for your new business. The important thing to remember in approaching a broker is to come off as a qualified buyer, not as an amateur.

Question: Can I simply seek out the seller directly? If so, how?

Answer: Actually, most buyers don't consider this strategy even though this is exactly the way business brokers get their best listings. The advantage is that you are able to get to good candidates before the business is "officially" up for sale and thus avoid the competition of other prospective buyers. You've heard the saying before: "EVERYTHING IS FOR SALE". This includes businesses as well. What you need to know is that all business owners are probably dreaming of an early retirement and want to travel around the world. Don't worry; your time will come to do so. Now by offering the seller a good price for his business (again, not using your own money) you should be able to get it on your own terms. Plus, by going directly to them, the seller will not need to pay extra fees during the transaction. The seller might want to avoid the lengthy procedure of prospecting the ideal candidate for the business. By placing an exclusive ad in the paper, the seller eliminates jokers by identifying serious buyers in the initial stage of negotiation. This is when your strategy can be used to your advantage because by eliminating the jokers, practically no competition will exist. At this point, you will be able to close the deal on your own terms. Voilà!

Question: How do I locate these businesses?

Answer: Mailing lists with specialized business brokers are available to you. You can get this information through our program reports. We'll supply you with quality business brokers so you can reach them and start your preliminary research. With this in hand, you can shop around and select the brokers, depending on the industry you're interested in. After all, extensive research is required to make sure that the broker will participate fully in finding the business best suited to your needs. Make sure not to reveal too many of your secrets in the preliminary stage of negotiation. Noticing your level of expertise in business, they'll be very impressed and will want to deal with you in the future.

Question: Is there any specific business terminology I should use during negotiation?

Answer: In our program reports, we teach the language of respect and credibility. That's the key.

You want to be taken seriously and, at the same time, you want to convey your respect for the seller's company. You should also make a statement of interest in a carefully constructed way. In addition, you will always provoke interest when you include and underscore the phrase: "I am a cash buyer." (not necessarily your cash). A response of from one to two percent of the businesses you contact by mail is excellent. You can follow up by phone if you don't hear from them. Remind them of the letter you sent and make the same general inquiry.

Question: If they say "yes" or "maybe", what's the next step?

Answer: Invite the owner to breakfast or lunch, and also ask for a tour of his or her facilities. You might call this the "sniffing and circling" phase. I will discuss later how to qualify and analyze a business and what documentation (financial mostly) to request from the owner.

Question: What other ways can I obtain quality leads?

Answer: Advertise your interest in buying. Many specialized magazines are offered for these purposes. The yellow pages and local newspapers can attract potential sellers. Look for categories, such as "Business for sale", "Business opportunities", and "Franchise for sale". These ads offer possibilities to buy available businesses throughout your city or state. Sellers place most ads under these different categories, a method that can be especially effective for potential buyers because there is very little competition in purchasing businesses through classified ads. You have to know precisely what kind of business you're looking for in order to carve a niche.
Always make yourself available to visit the seller and cut yourself an interesting deal. Now, you probably want to know where to place your ad. Selecting the right newspapers will list telephone numbers to contact these specific newspapers or magazines. For broader categories, the local Sunday classifieds will do just fine. Advertising in this way could also flag down sellers who cannot be reached by direct mail. And, as I've mentioned, when the prospective seller calls you, it means he or she is a solid lead. Because they're pursuing you at this stage, rather than you pursuing them, you have gained a psychological advantage.

Question: You mentioned previously: "in order to carve a niche". How can I carve myself a niche in the market place?

Answer: A niche is another way of referring to a "target market", discussed in the previous pages of this strategy. In today's hyper-competitive marketplace, long gone are the days of mere prospecting and crafty (and often misleading) sales tactics using 1,000 approaches to "close the deal." Due to the information revolution, consumers are now more informed, more educated, and incredibly more sophisticated than ever before. Using an over-abundance of techniques is no longer effective, or in the very least, they are not as effective as they used to be. Let's face it. People can no longer be "sold" let alone tricked. With information at their fingertips (such as with the Internet), they can find out almost anything in a matter of seconds. However and unfortunately, there are many companies still training their sales people to use these outdated approaches. Prospects not only see them coming but they also consider such techniques to be insulting. I do say "outdated" because, in our knowledge-based economy, more and more sales tactics are being frowned upon with each passing day.

Several methods can be used to carve yourself a niche.

1) The first rule in pre-qualifying prospects is to specialize. The most common mistake newcomers to any field of business make is to think that by expanding their portfolio they will secure more business. Nothing can be further from the truth. Specializing and narrowing one's focus as much as possible will paradoxically increase the likelihood of getting more business.
2) Specialization is in itself a fundamental marketing process. It's amazingly effective in creating "top-of-mind" awareness among a specific target market. For instance, an accountant specializing in car dealerships will get more business than a general accountant will. An advertising consultant specializing in print media for home furnishing stores will get more business than a typical advertising agent will. A photographer specializing in weddings will get more business than a regular photographer will. And the list goes on and on.

Over the years, specialization has been referred to as "niche" marketing. As more and more businesses get started, the less time, energy, and money people will have to spend in making choices of those with whom they choose to do business. Specialization helps to solve that problem.

Dan Amzallag: The american dream book: http://www.theamericandreambook.org