Finding a Buyer When Selling a Business

Finding a Buyer When Selling a Business

No matter how stellar your business plan is and regardless of all the work you’ve done to prepare your business for sale, all your efforts will go unrewarded until you find a willing and able buyer. In this article, we will discuss some tips on how to do just that.
Market to interested parties For starters, you’ll want to market your business to the most likely buyers. There are several reasons why an entrepreneur would be interested in acquiring a business.
For example, if you are the market leader in a specific niche, a competitor might be interested in buying your business, so he could gain access to your customers and cross-sell his own products. A competitor might also be interested in purchasing your business if you offer a product that fills a gap in his product offering or if your distribution channels would help him sell his products. Competitors also sometimes stand to gain from economies of scale in areas like sales, purchasing or production. If your business has substantiated growth potential, this would also be a point of interest to your competitors. Finally, competitors may simply want access to your employees and their skills.
Additionally, you should consider marketing your business to overseas companies that might be interested in expansion in the UK.
As you work to attract buyers, you will also want to be certain that prospective purchasers are in earnest. At the very least, you’ll want to have some assurance that a potential buyer would be able to afford to purchase your business. The advisers you hire to help you with the sales process can also help you with this.
Where to find interested parties There are numerous sources that can prove useful in identifying and locating prospective buyers for your business.
Begin with your own knowledge of your industry. When you think about your competitors, customers and suppliers, does anyone who might be interested in purchasing the business come to mind?
Consulting trade magazines, business directories and financial press can provide you with solid leads in your search for a buyer.
Don’t overlook your existing employees. Members of the management team are always potential purchasers when an entrepreneur decides to sell a business. You’ll just need to be certain that such an employee is in the position, financially, to buy a business.
The corporate finance adviser whom you hire to assist with the sales process will be an invaluable resource to you when it comes to identifying potential buyers. These professionals have access to databases of prospective buyers—in the UK and abroad—as well as a wide-ranging network of associates who can provide leads and tips. For example, your adviser might be able to introduce you to equity investors or management buy-in teams who would be interested in your business. And, again, your adviser will aid you in determining whether a prospective buyer is financially capable of actually making the purchase.
In certain industries, it may also be advisable to advertise your business for sale. If you are selling a shop, hotel, restaurant or pub, for instance, publications such as Daltons Weekly will cater to your needs.
Other tips You should work with your adviser to compile a shortlist of prospective buyers whom you will approach. You may want to split this list in two: The first portion would consist of your favoured buyers, and the second would essentially be a back-up list to consult if you don’t get any interested parties from your preferred buyers.
Finally, it is extremely important that you have more than one prospective buyer when selling a business. If you have only one prospect—and that buyer knows he is the only interested party—it gives him a great deal of leverage in negotiating the sales agreement.
Where can I find additional resources? For more information on finding buyers for your business, or any other aspect of selling a business, visit this government-sponsored business website: http://www.businesslink.gov.uk/bdotg/action/home?r.l1=1073861225&r.l3=1074410825&r.t=RESOURCES&r.i=1074411480&r.l2=1074400490&r.s=m