Business Brokers Beware

Enjoyed reading your article on eBay listing businesses for sale through its Business Exchange ("Add to Shopping Cart," Keeping Score, June 12). Although an Internet-based marketplace for buying and selling small businesses is happening, the real impact has yet to be felt. At a continuing-education class for members of the Michigan Business Brokers Assn., few knew of Web-based electronic exchanges for small businesses. These business brokers could easily be blindsided when the function of matching a buyer and seller is performed quicker, cheaper, and better through an electronic marketplace.

When a seller of a business transfers ownership to a buyer, the parties have created an unusual partnership in that the buyer normally pays for the business out of positive cash flow of the business over time. Therefore, extending the reach of the search for a compatible buyer, who is trustworthy and capable of consistently maintaining payments to the seller, is key to completing a deal. Beginning to build a trusting buyer/seller relationship directly over the Net is a better method for the deal participants than working with a geographically limited intermediary.


Business Coach

Signature Inc.

Ann Arbor, Mich.

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