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If you wish to buy or sell a business in Malaysia, currently it’s very confusing as you won’t know where to go or how to start.
Today’s business idea is a platform to help people buy and sell businesses, helping them with the process and smooth transition from A to Z.
The way I see it, there are 3 seller groups that this platform should target:
Group 1: Established businesses with over 10-30 years of operating. Highly likely are run by baby boomers or Gen X.
With the aging population in Malaysia, more baby boomers who are business owners will start to have thoughts of either retiring or passing down the business to their kids.
However, what if their kids do not want the business because it’s too “boring” or it’s not in the area of their interest?
It would then be a waste to just shut down the business and let go of so many employees.
The other option would then be to sell the business.
Group 2: Existing profitable SME businesses started by Gen X or Gen Y with 1 to 10 years in operation, but they are now looking to sell as they are bored of the business and wish to do something else.
Group 3: Loss-making business (usually startups) but has the potential to turn things around with new ownership and ideas.
Benefits as a Buyer in Malaysia
Assuming the buyer is buying the business in Group 1 or 2, they would have a much higher chance of succeeding in a business with strong cash flow and profit vs starting a brand new business from scratch with 0 revenue and 90% business failure rate.
The new buyer is also more excited to run the business vs the previous owner as this is something new and interesting to them, where they can acquire the business for strategic or financial objectives.
On the other hand, if the buyer is buying Group 3, they would have acquired a business at a relatively cheap price as the owner is not willing to bleed further and keep losing money.
However, this startup might have accumulated a certain amount of customer database and branding, so rather than starting from 0, the buyer can acquire the business for a cheap price and try to turn things around.
Getting Buyer and Seller to The Platform
This is a chicken and egg dilemma.
How do you get sellers to list their business if you have 0 buyers in your database?
Or how do you get buyers to give you their contact if you have no businesses for sale on the platform?
This is a problem every platform business has to go through. To kickstart things, you can run ads to have a buyer’s waiting list.
Once there are sellers you can inform the buyers and they will get the first-hand opportunity to view the business for sale.
As for sellers, you can also run ads to say you are helping businesses to exit, where you will act as an advisor from listing till the sale of the business.
The deal is made sweeter as you don’t earn a single cent from the seller until the business is sold. However, depending on your background, you may need to engage a lawyer.
Besides ads, you can also run a mass-scale email outreach to SMEs to say you are running this platform and if they are interested in selling or buying businesses, they can visit the website to learn more.
How The Platform Earn Money
You as the platform owner is in charge of being the middleman between buyer and seller.
Ideally, the platform should list the business for sale without naming the company name. The details that can be shown would include:
- Nature of the business
- Number of employees
- Database of customers/clients
- Reason for selling
- Revenue in the past 3 years
- EBITDA in the past 3 years
Each week, the buyer in your email list will be notified of a new business for sale together with the details above on your website. Overtime, your emails will be something buyers look forward to each week!
If the buyer is interested, they can leave their contact to you and you would then contact the buyer to issue a Letter of Intent (LOI) to the seller.
Once the transaction goes through, you will earn a cut from the seller for helping to sell the business. Similar like how property agents earn a commission for selling the home.
Another method of earning is you earn 0 commission but have a certain minority interest in the buyer’s acquired company, so when the buyer sells this business in the future, you will profit based on the share value then.
The final way of earning is probably the most lucrative one!
As the platform gets more popular, you can charge buyers a monthly VIP subscription to be the first batch of people to get access to the deals. You can also run sponsored ads in your email list for advertisers who wish to target people with business interests as your weekly newsletter grows.
Conclusion
This is no doubt a tough business to run and execute. However, if you can pull it off, every week will be interesting as you get to help buy and sell different businesses, each with its own unique story and way of operating.
If you love chaos in business, this is the best business idea to go for.
However, you prefer stability, here are the other business ideas to consider.
