Finding the Right Buyer should not be a long or difficult process, provided you have a profitable business that can be transitioned to and profitably continued under new ownership.
Of course, the Right Buyer is first one who will recognize the right fit between himself/herself and the business. A buyer looking for a heavy steel manufacturing business is not apt to purchase a retail candy store. It’s just the wrong fit. But, whether you have a viable manufacturing business to sell or have a viable candy store to sell, our experience tells us that today, there is a serious and qualified buyer ‘somewhere close by, who is actively searching for you.’
In fact, we have not known a time during our involvement with businesses-for-sale when there have not been more ready, willing and able buyers looking for good businesses, than there have been good businesses available for sale; or at least good businesses that have been effectively presented for sale.
We’ve found, by and large, when a sustainably viable business has not sold in reasonable time, then either:
- business buyers have been unable to find the business or unable to recognize the opportunity when they have, or;
- relevant information has not been reasonably available to those inquiring, or just too tough to get from the owner, or;
- the facts within the information had just not justified the price and terms asked by the owner for the business.
- Our experience has been, “satisfy the above and you’ll find the right buyer or the right buyer will find you.”
And in our experience selling small businesses, the right buyers have almost exclusively been total strangers to the business. Similarly, buyers searching for your business today are probably strangers to you and unconnected to your industry or to anyone in the industry. And specifically due to the lack of connection, industry strangers are probably the safest and most confidential buyers to work with, particularly when confidential information must be disclosed.
Of course, the right buyer could also be someone from within the industry. It could be or a customer, or a competitor, or it might be an employee or a group of employees, but unless that party has already contacted the seller, and has already expressed a sincere and capable interest in buying, for a seller to make any inquiry of any of these can certainly let the cat out of the bag and we suggest that you think this over carefully before doing so.
So with that in mind, set out the price and terms in the ad so it can be seen quickly to either fit the buyer’s range, or not, and equally important, set out balance sheet value along with sales and earnings levels so the buyer can see validity to the pricing, and then describe the type of business and the location of the business, both in general and non-identifying terms.
Then, when a good prospective buyer is found, or when a good buyer finds you, respond quickly to enquiries and in your response, continue to make it easy for the buyer to measure the fit and opportunity, but do so in a safe, secure, confidential and non-identified manner until there are reasonable indications that the fit has the potential both parties seek.
The Right Buyer should be one equally prepared to provide assurances of confidentiality and legitimate intent, and one prepared to disclose such information as the seller will need to confirm fit as well, and ultimately, the Right Buyer will be one ready, willing and able to pay the full fair market price for the business.
As said previously, finding that Right Buyer should not be long and difficult, once you’re ready. …but, it could be vital to the well being of your business and to the ultimate success of your selling process, that you disclose very little of your intent until you are ready with a fair market valuation as discussed in step 1 or based on some other justifiable reason, and a presentation of such as discussed in steps 2, and with a sale and transition strategy such as described in steps 4 thru 7.
And until you are prepared and ready, we recommend there be no trial balloons floated out around the industry; no premature listings on business-for-sale websites such as Business-Trader and others; no discussion with employees, customers, suppliers, competitors and no discussions with anyone other than those who may be assisting you, until you are ready to handle the results you are looking for and ready to avoid those you are not.
For business owners, selling the business is often a one-time experience, and importantly, a once-in-a-lifetime opportunity. Buyer’s, on the other hand, will often have had some previous experience. Some will have purchased a business before and some will have sold a previously owned business and some may be quite knowledgeable about the level of diligence required to reach an informed judgment and complete the deal. At minimum, most buyers will investigate several opportunities in their search for the right business, and your business will probably not be the first.
And just as there are buyers searching for a business just like yours, there are others searching for businesses not just like yours. Your business will fit some but not others, and you’ll want to make the fit (or lack thereof) as visible as possible to each potential buyer as early as possible in order to sort right fit from wrong as quickly as possible with minimum exposure. Price, terms, type of business, location and other relevant business facts (exclusive of identifying information), along with other suggestions offered above can go far toward sorting right from wrong.