Selling your Business How to Find a Buyer
You have decided you want to sell your business. How do you find a buyer for your business?
When a business has been in existence for many years, 10-20-30-40+ years it is not uncommon for the business owner to be approached about selling his/hers business. Or it is not uncommon to “hear about someone interested in buying the business” or have someone express “interest in buying the business”. Selling your business can be a challenge. I have seen and experienced this as a business owner and as a business broker. So one may think “if these people are interested in buying the business and I’m not even trying to sell it, I think it may be very doable to find a buyer when I am ready to sell my business.” But like a lot of other complex processes, “the devil is in the detail.” Often , when ready to sell your business, it turns out the person or competitor, or strategic buyer prospect that was interested in the business 1,2, 3 years ago, is no longer interested- their situation has changed. Or the guy that said he knew someone that was interested in the business, doesn’t have the resources to consummate a deal. So how does a business owner find a buyer for the business. 1. Try to find a buyer on his/her own. 2. Hire a Business Broker to find a buyer. Neither options are guaranteed. What is generally not known by one trying to sell a business is that MANY businesses that actively try to sell their business DO NOT SELL. Industry statistics show that well over 1/2 of all businesses that actively try to sell actually do NOT transition the business to a new buyer. But it is with little doubt that hiring a qualified business broker greatly increases ones odds of finding a buyer. It is my opinion that a significant reason why utilizing a business broker is the simple fact that most business owners already have their hands full running their business. And then to add the components of selling a business to their day is barely doable at best. Marketing the business, vetting out buyer prospects, tire kickers, not disclosing the confidential component of the sale are just a few responsibilities that are easy to do while continuing to run their business. Often there is not enough hours in the day to get all that done and run the business. A business broker is able to have “generic dialogue” with competitors and strategic buyers without disclosing the name of the business. If Mike from Mikes Towing approaches ABC towing about buying their business, then ABC business knows Mikes Towing is for Sale. If Scott from XYZ Business Brokerage approaches ABC Towing about a Towing business in the Jacksonville Florida area- confidentiality is maintained. But as a Business Broker we market looking for business buyers across many different platforms, often searching locally, regionally, nationally and internationally. So often business buyers are from “Somewhere else”. Also a business buyer is someone that buys a business. About 9 out of 10 people that approach about an interest in buying a business don’t buy a business. They may one day, but that may not be this year or next year. They are prospective business buyers.- As a business Seller you are looking for a Business Buyer. I personally have bought several business over the last 25 years. I have made the decision to buy a business- found a business that met my goals and then concern myself greatly if I cannot effectively acquire the business Many “Business Buyers” looking for a business do not ever make an offer on a business , or buy a business. They may be a perpetual business buyer prospect, or they may truly be ready to take the next step and be a business buyer. Knowing the difference between a prospective business buyer and actual business buyer can be the difference between an effective sale or a frustrating time demanding process . Selling your business can be a challenge. For More information on Selling a Business or Buying a Business Scott M Messinger (239) 770-2421