Something else that invariably surprises people: It takes much longer to find and buy a business than they imagined. We know people who have $5 million to $10 million cash to invest and want to move to Miami and buy a business, but they haven’t been successful after more than two years of searching.
So how can you do it? You roll up your sleeves and you network, call attorneys and accountants, search databases, and subscribe to receive e-alerts from websites that post business-for-sale opportunities. If you’re looking locally, you get involved in the community. If you’re more industry-specific, then you build a database of companies in that space. Attend trade shows. There’s no way around it: Finding a business to buy requires a lot of blocking, tackling and making phone calls every three months to the same people because you have to catch people when they are considering selling or try to pique their interest. Usually, that happens for a reason: when someone is sick, for instance, getting divorced or getting ready to retire. You must have your bait in the water when the fish are ready to bite.
• The best advice for finding the right business to buy: Match your skills and interests. Pick industries that you know or have experience with. South Florida has a lot of solid industries — cruise-related, real estate services (everything from construction to management to products), and import-export businesses like flowers and electronics, as well as all the usual industries like food, healthcare, distribution, logistics and transportation. A few key questions to ask yourself: Which of your skills would best translate to the potential new business? What sectors interest you and match up well with your skills? Do you need any special licenses or other qualifications to run the business?
• Narrow your target. The more you focus on specific criteria, the greater the chance you’ll find what’s right for you. When possible, get a good advisor to help you, especially if you’re coming from another country.
• Understand your finances. What can you realistically afford? Are you putting up all the money or will you need to find an equity partner or a lender? Be honest about your price range. A few key questions to ask yourself: How much can you spend on the business, how much collateral can you use, and how much income do you need to receive? Do you have good enough credit to secure financing from a bank or other lender?
• Know your motivations. Why do you want to buy the business? Are you doing it for the income or the lifestyle opportunities? For example, we know people who purchased yacht brokerage businesses because they like yachts.
• Consider the potential impacts on your lifestyle and your family. What types of hours do you want to work? Will you need to drive long distances or relocate?
• Be proactive. Network, talk to people, get some good advisors to help you.
• Be patient. Keep in mind that most sellers have likely been approached many times by potential buyers, so understand that you might not get every bit of information you need immediately. Buying a business takes time, sometimes months or years.
So, here’s the good news and the bad news: There are some good opportunities today and plenty of money available to leverage them — but there are lots of individuals, private equity firms and strategic buyers searching for those same opportunities. To succeed, you need a healthy balance of strategy, perseverance and, above all, patience.
James S. Cassel is co-founder and chairman of Cassel Salpeter & Co., LLC, an investment-banking firm with headquarters in Miami that works with middle-market companies.