Is it the hardest time ever to find a quality business to buy?

July 12, 2023

by a professional from Texas A&M University in Austin, TX, USA

I'll keep it short.

We work with clients who are in the process of buying businesses and need due diligence done on these businesses. The problem is that we have seen so many people lately who haven't found a business and have been searching for a long time. They're willing and ready buyers, but just can't find anything solid or quality.

We've helped walk through the diligence process for when they do find a business but it just seems that there isn't anything meeting their needs.

Anyone have any answers or help to this?

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Reply by a searcher
from University of Texas at Austin in Fort Worth, TX, USA

I think Bradley nailed it with "there are a lot of searchers looking for a well-established business, with strong cash flows, bought at a discount, with management in place and no capital required". If a business checks every box that many searchers have, 1) the business owner will likely be reluctant to sell and 2) if / when they are, it will not be at a price that many searchers want to buy in. Additionally, if a business owner is competent enough to build a business with the desirable attributes the searcher is after, they will be competent enough to garner top dollar for their business (i.e. their baby). If in the unlikely event there is a life event that forces an unexpected sale, they will likely go through trusted connections for a transition, preferring a competitor, another business owner, or family office over a random individual with no previous rapport or trust.

To me, it is similar to the person complaining that there are no good men or women to date. In reality, there are near countless options, but their standards are just way too high.

Reply by a searcher
from Liberty University in Rochester, NY, USA

Deal flow hasn't been an issue. I think there has been a massive uptick in the number of people interested in buying businesses because of extreme popularity of content on YouTube and other Social sites. The key missing ingredient is what is the specialty of the buyer and how can they see value in a business that other people cannot see. That usually requires industry experience in one way shape or form as well as a growth mindset. I think there are a lot of searchers looking for a well-established business, with strong cash flows, bought at a discount, with management in place and no capital required. These deals are certainly fewer and farther between, but still possible. Just my two cents.

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