The Problem:
If one wants to sell a brick-and-mortar small business, one either needs to find a buyer oneself, use a “business broker,” or get really lucky. Of course, if neither of those three things happen, wither the business doesn’t get sold or it gets sold for a non-optimal price.
The Business
An online business marketplace, widely accepted as the standard and the place to go for sale or purchase of a business.
The most important aspect of this business is building mindshare. That’s where the opportunity is as well. There is no truly great business marketplace to be found online. There should be. This means you need a lot of money.
Despite the direction in which we are and have been moving – permission marketing, a la Seth Godin – money still buys attention. This is especially true for the target market for a business marketplace. I believe the target market is advisors – accountants, lawyers, and financial advisors. You need to sponsor Phil Mickelson, sponsor a PGA tour event, or otherwise capture the attention of middle aged business people. (These are often the folks who are very much on the Internet, but not exactly engrossed in the Internet.)
Buying a business is not simple. The site needs to make present opportunities, qualify prospective buyers in some fashion, and provide introductions. The site does not handle the transaction.
Franchises need to be separated on the site. Searching for businesses to purchase and being bombarded with franchise opportunities is annoying. I’m not suggesting there is anything wrong with franchising. On the contrary, it is a viable business methodology and the right avenue for many people. But the audience I’m talking about is well aware of the existence of franchises and their place in the business landscape. They realize franchises are easy to find. The advisor or potential purchaser needs to be able to spend her time in this marketplace searching for hard to find business opportunities.
Doableness
Technology isn’t the problem. Money to accumulate mindshare is the problem. A partner, such as an existing boutique investment bank or consortium of professional practices, might be optimal for this idea.
There are competitors in this space, but they are capturing an irrelevant sliver of the total business sales market.
My Thoughts
The Internet kills the middleman through better information. Business brokers seem a likely candidate to go down. Could this eventually lead to investment bankers? It could. But then again, the vast majority of real estate is still purchased with a broker. It’s an evolving process.