If you are reading this post, then it’s likely that you are doing this for the first time. As you know already, buying a business is easier than finding the right buyer when you are looking to sell one.
Unless you are sitting on a goldmine and selling it at an unbelievably low price, you will always struggle to find buyers. Even if you are ignoring the valuations and pricing your business low, you may still get hesitant buyers wondering why the price is cheap.
Long story short, there is no way around it. If you want to get a fair price for your business, whether online or offline, you need to sit through and participate in presentations, meetings, negotiations, and the nerve wracking experience of waiting for a call back.
The Perfect Buyer
Before we move on to discuss the tips to find the best buyer, let’s take a moment to define what we mean by the term “best buyer.”
Yes, you want to get the best price, that’s pretty obvious. However, you also want to deal with someone who has experience in your industry. For instance, selling your eCommerce business to someone who has never heard of SEO is certainly not the way to go. That puts your employees’ jobs at risk as the future of the firm becomes dangerously uncertain. If you don’t care about your company’s future or the wellbeing of your current employees, then there is a selfish reason for finding a buyer with industry experience. Two words, smooth exit.
If you sell your company to a newbie with no experience of running a similar business, you would have to stick around for longer to explain the many complexities of your operations. The transition is going to be long and will demand a lot of effort on your part. Similarly, if you sell it to a business owner who knows how to operate in the market your business is in and has industry experience, the transition is going to be smooth and fast.
Without further ado, here are the 5 tips to finding the best buyer for your business.
Get Your Company Listed on a Niche Business Broker Site
By niche business broker we mean brokerage firms specializing in your industry or the type of business you are trying to sell. For instance, if you are looking to sell an online shoe store, it’s best to contact an eCommerce business broker as opposed to a company specializing in brick and mortar retail businesses.
While business brokers do take a commission or have a listing fee, they have a network of buyers. They also participate in the negotiations and take care of the paperwork to ensure a faster exit. While general business brokers are neutral, you can hire a seller-side business broker who would negotiate to sway the deal in your favor.
Qualify Buyers Before Scheduling a Meeting
You don’t want to meet everyone who reaches out to you. Create a filter to exclude people. This should include buying potential, industry experience, and motive. Direct competitors may try and schedule a meeting in hopes of gathering business data. Make sure to qualify the buyers to screen out the undesirables so you do not waste your time.
Expect Delays
Finding a buyer is going to take time unless you are extremely lucky. One of the ways to save time is to continue talks with multiple buyers at the same time. Even with that, you are looking at months of meetings, presentations, verifications, and negotiations. Give yourself at least a year to find the right buyer and close the deal. Till that point, it should be business as usual as nothing turns away potential buyers as declining sales figures.
Understand What the Buyers Want Before Your First Presentation
There are several reasons why a potential buyer may be interested in your business. A buyer may be interested in your assets and employees to scale up their own operations. They may also be looking to remove competition or capture a new market. Buyers also look for acquiring smaller firms to compete with new disrupters in their industry.
Finding out what they are truly looking from the deal will help your create your presentation accordingly and give yourself a greater chance at success.
Never Try to Downplay the Struggles of Your Business
One of the biggest mistakes of selling anything is hiding the negatives. If discovered later, these negative aspects of your business can potentially spoil the deal.
Buyers understand that no business is perfect and without its own set of challenges. Be upfront about the negatives and quickly drive the conversation to the positives of your business.