If you are selling a business, it is wise to shift your mindset from simply, “How to find buyers for a business,” to “How to find the right buyer for my business.” Finding the right buyer for your business is critical for a successful transaction and a smooth transition. Here are some factors to consider that can help you identify the right business buyer for your company.
Who are your company’s potential buyers?
You may not have realized that you already have a list of potential buyers. Almost anyone could be a buyer: employees, suppliers, competitors, customers. There is a variety of potential buyers, and different people buy for different reasons. You will want to consider these different reasons when marketing your business. Most business buyers fall into three categories: individual buyers, financial buyers, and strategic buyers.
Are financially secure individuals looking to purchase and manage their own company. Often, this buyer will have good sales, marketing, leadership, and people skills and will place high value on finding a business that aligns with his or her interests.
Are generally established entrepreneurs from within the same industry sector who are looking to expand. Strategic buyers normally have strong financial backing, an industry background, and the experience to ensure success and longevity of the company.
Also called Private Equity Groups, are generally a group of 2 or more investors looking to purchase, invest in, and resell a highly profitable business, with the goal of maintaining the highest possible return for their investors. Financial buyers generally possess a stellar work background and strong financial capabilities, with funds available to push the business into further growth.
Take a moment to read this article for a more detailed look at the three main types of business buyers.
Where do you find a buyer for a business?
There are multiple outlets available for finding a buyer for a business. Trade publications, industry organizations, and online listing services are all viable routes; but a point must be raised here: when selling a business, confidentiality is vital. Finding a buyer for your business is not as simple as spreading the word that you are selling. Why? Competitors can try to use the information to sell against you. Customers may hear that your business is for sale and begin to shop around, unsure of your company’s future. Employees may question the stability of their employment and begin to look elsewhere.
Working with an intermediary is the best way to find a buyer for your business while maintaining confidentiality. The broker can field inquiries from potential buyers and reach out to prospects without ever mentioning your name or the name of your business. For a more detailed comparison of selling a business on your own vs. using an intermediary, consider this article.
How do you qualify a prospective buyer?
Qualifying a prospective buyer is another essential part of achieving a successful sale. Documents like financial background information and confidentiality agreements are standard protocol for interested buyers. Buyers must be pre-screened to confirm that they are financially capable of purchasing your business. Beyond the financials, consider whether the buyer has the skills, knowledge, or experience to help the company thrive.
Here again, professional services can be an enormous asset. At Viking Mergers & Acquisitions, we have an established network of pre-screened, thoroughly vetted buyers who are interested in buying businesses with us. Only qualified buyers who are a complement to your objectives are presented to you for consideration.
As we mentioned above, finding buyers for a business is just one step toward finding the right buyer for your business. Through decades of experience, Viking has developed a streamlined system to equip an owner to sell his or her business for top dollar and at a closing rate that is four times the industry average. If you are thinking of selling your business, we are here to help. Contact us today for a no-cost consultation.
- How to Sell a Business: Broker vs. DIY
- 7 Steps to Selling a Business
- How long does it take to sell a business?