By Peter Siegel, MBA, Founder of BizBen.com
A west coast businessman learned the hard way about revealing too much in a business for sale advertisement.
According to an article written for BizBen, the seller thought it was important to give as much information in the ad as possible, so only people specifically interested in his business would respond. But when people started visiting his store during business hours to ask for more details, he realized his mistake.
Ruining the confidentiality about your sale is the largest problem with providing too many details in the business for sale ad/posting. You could also discourage or confuse prospective buyers with some advertised facts.
Business Broker Peter Siegel, MBA, the Founder & Senior Advisor at BizBen.com, suggests these few guidelines to ensure that a business-for-sale advertisement will attract interest without working against the objectives of the advertiser.
1. Location is important to many buyers and probably should be included, using a very general description, in most ads offering a business for sale. People who may be potential buyers probably want to know whether the manufacturing company is in a new and modern industrial park or an old factory setting near downtown. The ad for a retail business in Georgia should let readers know if the company is in a suburban shopping mall or a part of the central business district. One strategy to give important but non-revealing information, is to mention the neighborhood in a large city–sporting goods store in south Fulton County; or just name the county, in the event the business can be identified simply with information about its city.
2. Contact information should not, of course, be easily associated with the business. One seller didn’t know how callers responding to his furniture store for sale ad/posting were able to determine the identity of the company. The ad included the number for his home phone, rather than the store’s phone number. Clever buyers simply used a reverse directory to discover his name using the phone number, then conducted an online search using his name and the term “furniture store.” Here’s where hiring a business broker will help preserve seller confidentiality. Prospetive buyers will call the broker instead of the owner.
3. When an ad states that “Complete information will be provided to qualified buyers,” potential buyers should understand that they’ll have to supply their information to the seller if they want to know details about the company for sale. Serious buyers ready to satisfy the seller’s confidentiality requirements will respond to the ad expecting to agree to a non-disclosure document, and to provide requested personal information to the seller. Those who are more curious than serious will probably not respond to the advertisement.
4. Detailed information in ads may or may not make the phone ring. Revealing that a restaurant for sale generates $5,000 in monthly earnings to the owner may result in responses from those who want to make that amount of money. That’s too much information, however, to attract the buyer who needs to generate $7,000 to $8,000 per month in earnings. Yet that buyer’s response to the ad would be welcomed, because the seller would have the chance to explain the potential is there for an active owner to quickly boost earnings by 50%.
Whether or not to provide earnings figures, rent costs, years remaining on the lease, asking price, annual growth rate and so forth, is up to the seller. He or she should understand that while certain facts included in the posting might provoke responses, that information is likely to discourage others from calling or emailing the seller to express and interest and request more information.
One possible strategy is to run the ad with information for a couple of weeks, then change it by reducing the detail before advertising again.
Peter Siegel, MBA is the Founder & Senior Advisor (ProBuy & ProSell Programs) at BizBen.com (established 1994, 8000+ CA businesses for sale, 500 new & refreshed postings/posts daily). Get expert advise when placing an ad to sell a California business. Reach him at 866-270-6278 to discuss strategies regarding buying, selling, (or financing a puchase of) California businesses.Read More