If you’re thinking about typing "businesses for sale" into Google…

You might want to think again.

According to Jeremy Harbour, that's exactly the wrong place to start.

Harbour — the founder of The Harbour Club and 3X keynote speaker at the Business Acquisition Virtual Summit — says real estate experts don't spend their days staring into estate agent windows, nor should serious acquirers waste time on broker websites.

The deals worth doing are almost never the ones being actively marketed…

Here's why, and what to do instead:

When a business hits a broker's desk or shows up on a "businesses for sale" website, a series of distortions has already taken place - and every one of them works against the buyer…

The price has already been inflated. Brokers, Harbour points out, frequently compete for listings by telling sellers what they want to hear. If one broker says a business is worth $1 million and another says $3 million, the seller signs with the $3 million broker, and rarely asks where the extra $2 million came from.

Many brokers charge an upfront fee, so their real business model is signing people up, not selling companies. The business may eventually sell for the original $1 million, but only after sitting on the market for 1, 3, or even 6 years.

The seller has mentally checked out. A business owner who has formally put their company up for sale has already moved on emotionally. Their spouse may already be picking the leather color in the Mercedes showroom.

The result is predictable: businesses frequently decline in the year after they're listed, because the owner's attention has left the building.

The numbers have been "optimized." Harbour is generous in his framing (calling it optimization rather than manipulation) but the pattern is consistent. The year right before a sale is mysteriously the “best” year in the company's history…

That’s because expenses get added back to inflate profit. The owner's salary, interest charges, the coffee machine, and half the phone bill are all conveniently reclassified to justify a higher multiple.

You'll get pulled into competitive bid situations. Real or imaginary, another buyer is always "right there." Harbour warns that buyers can invest weeks or months chasing a deal only to discover the seller had a cash buyer all along & was using them as a stalking horse to push the price up.

You may be buying yourself a job. If the owner-operator is leaving, the buyer often steps directly into their role.

Add a leveraged buyout to the mix, and the new owner now has a full-time job and a bank taking every spare dollar of cash flow for the next five to seven years. If the business shrinks, the bank takes the house.

Some acquirers try to flip the problem by hunting for distressed deals through insolvency (bankruptcy) practitioners. Harbour calls this "a doctor looking for patients in a graveyard."

By the time a business reaches the insolvency practitioner, it's too late:

The real opportunity, he argues, is the owner who is thinking about calling an insolvency practitioner — not the one who already has. Insolvency is a tool that can form part of a wider strategy, but it isn't a source of deals.

If listed businesses, brokers, and insolvency practitioners are all the wrong places to look - where should an acquirer actually focus?

Harbour's answer: position yourself as an investor, then learn to spot the signposts in everyday life.

Practice the pitch. Networking events are an obvious starting point. Stand up at a room full of business owners, announce that you're an investor in small-to-medium-sized businesses, and you’ll attract conversations much more easily.

Mine the contacts already in your phone. This is Harbour's most actionable suggestion, and arguably the most overlooked. Most acquirers have hundreds of people in their phone - and none of them know what kind of deals are being sought.

He recommends making a list of 30 people who haven't been contacted in a while and calling each of them, starting with how to help them before mentioning what's being looked for. He calls this "the karmic deficit" — help them, and they feel compelled to help back.

By the 30th call, the pitch is sharp, the common objections feel familiar, and the acquirer is ready for live conversations with real sellers.

Tune your filter. Harbour points out that most people aren't really listening in conversations… they're just waiting to say the next thing they want to say. Acquirers who genuinely listen find deals constantly hiding inside everyday conversations.

He cites Andrew, an early Harbour Club attendee who — just a week after finishing the course — bought a lighting manufacturing business from a woman he met at a dinner party on holiday. The conversation would have been forgettable to anyone else, but Andrew was tuned in.

The thread tying all of this together is simple: the best deals come from direct conversations with motivated principals, not from intermediaries marketing inflated assets.

Dealing directly with the owner means understanding their actual motivations, like retirement, burnout, a health scare, a divorce, a partner dispute. Then, it’s about structuring a win-win that solves their real problem. This beats trying to negotiate a broker down from a fantasy valuation.

It also means avoiding the worst behavioral patterns of listed deals: the deal fatigue, the last-minute price chipping, the competing bidders, the deteriorating business. When the seller isn't actively shopping the company, those dynamics are less common.

Buying a business that's for sale is, in Harbour's framing, the acquisition entrepreneur's version of looking for love in a singles bar at closing time. Everyone in the room knows why they're there, the prices have been inflated for the occasion, and the best options usually left hours ago.

The deals worth pursuing are sitting with owners who haven't yet decided to sell - owners who, with the right conversation, would happily structure something creative with someone they trust.

Most of them are already in the acquirer's phone...

The question is whether anyone has bothered to call.

3 actions worth taking this week:

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