Buying your own business online
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Bob Moon: If you’re unemployed or afraid of becoming unemployed, you might be browsing the Web for job listings. Well, here’s another idea: Maybe just landing a new job isn’t the answer. Why not become your own boss? It turns out you can look for that online, too. Several Web sites list businesses for sale. Think of them as a kind of entrepreneurial Craigslist. Of course, buying a business online is a little complicated.
Marketplace’s Eve Troeh learned how it works.
Eve Troeh: For the past two years, Jill Bernheimer sold wine over the Internet. She worked from a small office where she shipped bottles to customers. But she recently opened her own brick-and-mortar wine shop in Los Angeles, called Domaine LA.
Jill Bernheimer: I’ll give you a peek, they’re really beautiful wine racks that are custom made out of sustainable black American walnut.
There’s also recessed lighting, comfy couches and a library of wine books. Pretty fancy for a place that was a mini-mart just about six months ago. Bernheimer had to reinvent the space, but she was thrilled to find it. It’s not easy to find good retail space, with a liquor license, in L.A.
Bernheimer: I was looking for a good six to nine months. Did the traditional look “for rent” signs around town.
No luck. Then, Jill — who, remember, is a Web entrepreneur — thought: If you can buy wine online, why not a wine store? She stumbled upon a Web site called BizBen.com. It lists businesses for sale in California.
Bernheimer: I found this listing probably within the first two times I used BizBen on a search.
Web sites that offer these searches come in many forms. Some are the online classified ads from newspapers. Or they might be the listings of a real-estate broker who specializes in small businesses.
The site BizBuySell.com is the largest place to buy and sell businesses online. It’s been around for about 13 years. General manager Mike Handelsman says it covers just about everything
Mike Handelsman: Retail shops, restaurants, gas stations, dry cleaners, those kind of business. We also have manufacturing, Internet and other lines, and they go up to many millions of dollars in annual revenue and sale price.
He says the appeal of these sites is the same as any online marketplace: reach. Anyone, any place, can look at the ads at any time.
Take Jason Luban. He sold his San Francisco area software company, Trigram, to a guy in Cleveland. He wanted to spend more time on his real job, doing acupuncture.
Jason Luban: I was much more passionate about Chinese medicine and doing acupuncture than I was about doing software. And the software part came about almost as an accident.
But software was just what Jonathan Schultz was looking for. He’d worked in the field for a few start-up companies, and he was ready to start his own venture. He’d been browsing ads online for years.
Jonathan Schultz: I’d always had some interest in moving from an employee position to an owner position. And I found it kind of fun to browse and see what was available.
Schultz bought the company, and it took just one visit in person to seal the deal.
Schultz: I can’t imagine how else I would have come across Jason and Trigram without utilizing Internet brokerage.
But not all online business sales go this smoothly. The online directories don’t validate or vet the ads. Buyers have to do their homework. Some ads are placed directly by owners; many are posted by brokers. Owners and brokers can be stingy with information in the ads, because they don’t want to reveal too many specifics until you show you’re a serious buyer.
Jill Bernheimer — she’s the one who bought the mini-mart turned wine store — says it was often hard to sift through the ads.
Bernheimer: A lot of the locations are far flung, a lot of the brokers are asking considerably more than a business is worth.
Bernheimer hired a lawyer to protect her in her deal. She thoroughly checked out the store before she signed anything. But the mini mart still came with a lot of things she didn’t want for a wine store.
Bernheimer: There’s a Lotto terminal in the back that I haven’t been able to get the California State Lottery Board to come pick up. Think they’re hoping I’ll sell Lotto tickets and fine wine.
Troeh: Not an option for you?
Bernheimer: I don’t think I’m going to pursue that revenue stream.
But maybe there’s someone online who will.
In Los Angeles, I’m Eve Troeh for Marketplace Money.
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