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by jandrese
2122 days ago
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It would be a valuable service, but there's probably no money in it. Would it be so crazy to put your business up on eBay or some other auction site? Explain how the business works, what the customer base is, what kind of work the owners and staff do every day, make an offer to buy them out so they can retire. Probably would end up being used mostly by corporations looking for new places to bulldoze and set up a chain location through. Weeding it out to just people with a passion for running an independent small business would be hard. |
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Business brokering is a thing. In California alone there's an entire association, California Association of Business Brokers (https://cabb.org/), and I would assume such an industry exists elsewhere. I used to peruse listings at sites like https://www.bizbuysell.com/buy/ and daydream about owning a small convenience store.
I once even tried to buy one, going so far as to sign an offer agreement, but that was before I understood that banks don't normally give small business loans using the business alone as collateral. Federal SBA loans go through banks, which will still expect security, so it's not that much easier even if you're a minority, able to benefit from [mythical] preferential treatment. The owner I tried to buy from was a serial small shop owner. Later I learned that he was trading-up his convenience store (aka liquor store in SF) for a mailbox and shipping store. Apparently in SF those do well, or at least the place he bought in the Outer Richmond (Little Russia) did. He was from Georgia and spoke Russian.
I think the problem with butcher shops, flower shops, etc, is that they require apprenticing or at least having significant prior experience. The agreement with the liquor store owner included a month of working side-by-side to learn the business and to verify cash flow, but that's not a very complicated skillset to learn compared to butchering.
Also, once you have enough assets to start a business or buy an existing business, you're probably well into a career and have other responsibilities and obligations that make it difficult to switch occupations, and definitely difficult to apprentice. Most small business owners want a quick exit. They don't usually make alot of money. Aside from their home (which may have been mortgaged for the business), their savings is tied up in the business--goodwill, stock, and any intangible assets like accounts payable and licenses. (At that time a liquor license in SF was worth about $20-30k.) So there's a real mismatch between those who hypothetically would be willing to take over a business, and those who are actually in a position to do so. One obvious large cohort is children of the owners, and that's partly because the owner is effectively willing to sell at a discount (at least in terms of risk, if not the nominal price, such as with seller financing).