Which marketing method do you use to find the deal?

January 18, 2022

by a searcher in Jaipur, Rajasthan, India

Hello guys,

Another question out of curiosity. Out of all the marketing methods that are available, which works the best for you?

I am trying to understand if there is a particular marketing method that works better than the others.

Share your experiences.

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Reply by a searcher
in Alpharetta, GA, USA

Kuldeep I’ve used Bizbuysell and had good success with it. Closed on one purchase 3 years ago, $500m of cash flow and paid 3x for its. I’m in the process of buying #2 right now, about half the size and paying 2.5x. I know a lot of searchers are looking for bigger and BBS tends to be Main Street not Wall Street. That works for me - I am 100% self funded (equity) with SBA financing. If you are willing to be patient and flexible then BBS screens will return a lot of different businesses you might not ordinarily even be aware of. Typically, smaller businesses go for lower multiples than larger businesses. As a first time searcher, paying a lower multiple = greater debt coverage ratio = greater margin for error. imho everyone needs that when they are starting out because you don’t know what you don’t know until you make an expensive mistake (what I call paying for an education). Anyway my 2c.

Reply by a searcher
in Alpharetta, GA, USA

Kuldeep one more thought here - in a purchase negotiation for such an illiquid asset, whose value is highly debatable, one almost cannot overstate the importance of negotiating leverage. Typically one side has more and you want to be that guy. Again just my opinion but if you are a business owner and someone comes to you wanting to buy your business, you have the upper hand. You can tell them to go screw or offer at a price or whatever but at the outset you hold all the cards.

Conversely if you see a for sale listing that means you as a buyer have the leverage. The owner wants out. You can ask why the owner is selling and often times it becomes apparent they HAVE to sell and that gives you a lot more leverage. If they are in a hurry you can slow play it and get your terms. Etc.

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