A $4 Billion Problem

by 10 comments
I found this to be really really interesting. There's links on this stuff, but reading is boring so this video sums it up:

Based on the QTY of businesses that actually do sell, this is a problem that presents a HUGE market opportunity.

Based on the numbers in that report, using quick math, I calculate a $4BN market opportunity...

Any ideas on solutions?

Anyone want to brainstorm around this?

#offline marketing #billion #problem
  • Profile picture of the author Ron Lafuddy

    I couldn't get the video to play, although the darn commercial played fine.
    I did get the report and will take a look.

  • Profile picture of the author NewParadigm
    It's a huge opportunity but a HUGER problem to solve.


    The prep work to properly set up and market a small biz takes a lot of time.

    Often due diligence and prep is pretty much the same amount of work for businesses with revenue of $1-$5million as it is for $20-$100million. So with the smaller business the transaction costs can be very high.

    If one can develop a step by step largely automated system to lead the owner to do much of their own prep that might help. Except how many will take the time to do it?

    Then if a broker steps in to do it, the business does not want to pay the fees to do so.

    It is a dilemma(opportunity) but a really tough one.

    Not to mention the flighty business owners thinking their baby is very special. They are tough to deal with. It's much easier dealing with a public company CFO and buying a $1billion divsion from them. Much less emotional attachment.

    The trick is automating as much of the prep/due diligence as possible to keep transaction costs down.
  • Profile picture of the author bizgrower
    All of the cases I have seen where the owner finances, the business goes under rapidly, or the owner has had to take the business back. This has been with hotels and restaurants.

    I suspect most sellers of viable businesses do not want to take the risk of financing and would prefer to get the cash.

    If someone cannot get financing and does not really have the cash reserves to operate a business or get a loan, it's likely a telling sign about their inability to operate a business.

    On the other side of the coin, most businesses for sale seem to be worth nothing more than the current value of the physical assets.

    I think the 80/20 Pareto Principle is really at play here. Not what a business broker is saying.

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