Selling a business using Craigslist.
For some business owners, it may make sense to sell their business themselves. They may have a small home based operation or their business size, revenues or profitability don’t justify the cost of using a broker. In these cases the owner may try Craigslist to advertise their business—but is it effective? The truth is that while finding a real buyer through Craigslist (or similar site) may seem like the biggest hurdle, most sellers run into problems after finding an interested buyer.
First, are their buyers for your business on Craigslist? Maybe. It’s been my general experience that Craigslist buyers are at the lower end of the acquisition scale: business opportunities less than $25,000 and more typically less than $10,000. These are typically simple businesses that are bought as cash deals. Historic performance is less important than the value of the assets and the general opportunity. Tanning salons, hot dog carts, small c-stores may be the type of businesses that can sell on Craigslist.
But let’s assume you find a buyer, what next? Most buyers will request tax returns, P&L’s and other confidential information. If you’re listing your business confidentially they’ll want you to identify the business to them. How do you determine if they are qualified or realistic buyers? How do you ensure they keep your material confidential? Most FSBO’s struggle with this stage of the process—it can be uncomfortable and awkward establishing trust with a potential buyer and once you’ve built a rapport you’ll need to test that trust during any negotiations. Since most inquiries never end up buying a business you’ll need to prepare yourself for the frustration of having talks and negotiations fall apart.
If you are thinking of using the site to sell your business check out other local listings to see what’s available. Craigslist users vary tremendously by region. If there are a number of businesses being offered in your price range, it may be worth a try. But remember, selling the business on your own will require you to develop a plan for dealing with inquiries.
