- Why interest is not enough to qualify a buyer
- The traits of the right buyer for your business
- How to find the right buyers long before you need to sell
- How to prepare to sell your business at a great price
- The easiest way to locate the best buyers quickly
Did you know that 75% of business owners regret selling their business?
Many feel that they sell their business for less than it is worth. Others might feel overwhelmed about selling their business to the wrong buyers. The business owners fear the new business owner and employees will not carry forward the vision and legacy.
All these fears are legitimate.
Being an entrepreneur who has invested years, energy, and resources into building a business, it can be scary to potentially see your vision shattered by new acquirers of your business. Therefore, finding the right buyers for your business is the only solution to save yourself from future regrets.
The right buyer is not the one who offers you the highest price for your business. Indeed, the right buyer must have a vision aligned with yours and know what he is doing.
We’ll show you how to find and attract the right buyers, even if this is your first time selling your business.
Why You Need the Right Buyers for Your Business
Why can’t you sell your business to the first person who appears and shows interest?
One mistake most business owners make is assuming that their competitor, client, or supplier can be the best fit to sell their business. It can be accurate in certain situations but it is not always true. There have been numerous instances when business owners thought their supplier would be a perfect buyer for their businesses.
But did it actually happen?
No, the suppliers were not loyal and just wanted to shatter the business by blowing air about expected business sales and stealing the business’s customers.
This is just one example. There are many reasons why finding the right buyer for selling your business is the most important block of the deal. When the right buyer buys your business, you will note that everything is smoother than ever. Due diligence, business negotiations, financing, plans, etc., are always more accessible with the right and willing buyer.
Some advantages of finding the right business buyer include a higher potential for growth for your business, promising owners, and strategically driven leadership. Besides, the right buyers who understand the importance of your business and its future potential will offer you the best price.
Who is a “Right Buyer”?
Finding the right buyer is not just important but also a job to do. Some statistics suggest 40% fewer prospective buyers for a selling business than the owners think. Besides, only the experienced and informed buyer can choose the right business.
How do you define the right buyer for your business?
1. Has Intentions to Keep your Business Alive
Acquisition entrepreneurship—acquiring and continuing an existing business—is a more popular route many business persons adopt. However, not every business buyer intends to keep the acquired business alive.
How can you know that the buyer intends to keep your business alive? The first thing to ask is if the buyer has their heart in the whole acquisition process. Asking about their intentions or plans for the company is a great question to ask as well.
You can assess their enthusiasm, involvement, and effort to understand business operations during and before acquisition. For instance, the entrepreneur interested in continuing the legacy will pay attention to what is being told about business complications, industry dynamics, etc.
Being a seller, you need common observation skills to catch the pretentiousness of a buyer if they are not right for your business.
You need common observation skills to catch the pretentiousness of a buyer if they are not right for your business.
2. Familiar with Your Industry (or Willing to Learn)
Selling your business to an individual inexperienced in your industry could not be worth it. Besides intending to keep the business running, the right buyers know what questions to ask.
It is only possible if they are well-equipped and well-researched about the industry. Even if they do not belong to your industry, they should be interested and willing to learn about the industry.
If they understand the industry dynamics, they’ll naturally ask you the right questions. They will ask about your supplier relationships, the reason behind selling the business, potential challenges the business might face, key resources, etc.
A growth-oriented buyer is a gem to keep. If you’ve found a buyer with the vision to follow and scale your business, you know how lucky you are as a business seller. Such a buyer is not an informed individual just buying a business because they want to run it.
They understand the acquisition process, challenges, and strategies and appreciate the dynamic factors involved in the business buying process. And the right, growth-oriented buyer will only get attracted to your business if they can see its growth potential.
4. Has a Strategic Roadmap for Doing business
Several factors are involved whenever an acquisition, merger, or business selling/buying occurs.
There are a lot of cultural, environmental, and technological shifts within the businesses besides the leadership change. The right business buyer is the one who has already developed a roadmap of embracing the challenges, strategically addressing them, and making the change happen with minimum damage.
How to Attract the Ideal Buyers to Buy Your Business
Only knowing how to find the right buyer will not sell your business. You must make your business the kind your ideal buyer is interested in.
Let’s take the example of property selling. Homeowners stage the property before they list the home for sale. Staging is the process of making your property look attractive to potential buyers.
Similarly, attracting buyers to buy your business is also very crucial. Especially when only 20% of listed small businesses for sale sell yearly.
Prepare an Exit Strategy
You might not have planned your exit strategy as selling your business. But, it is crucial to consider it as an option and plan accordingly.
Only half of businesses plan their exit strategy. Therefore, you must plan your exit strategy and consider acquisition an option. Prepare an exit plan to formalize the process of selling your business to other entrepreneurs.
The buyers will be attracted by the fact that you’ve all the homework done on how the process will go.
Don’t Overthink, Just Work on Building your Business
The day you started your business was not the same day when you had a plan to sell it. You worked hard and tirelessly to build your business. You should not be overthinking about selling a business and making necessary arrangements to attract buyers.
The most effective and real way to attract the right buyers is devoted to working and building your business. Work to highlight your company’s strengths, revenue growth, and strong values. If a business is doing well, most acquisition entrepreneurs naturally want to buy such a business.
Strategic connections and partnerships in business environments can offer you irreplaceable benefits. Start making connections from today, even if you don’t intend to sell your business anytime soon.
You never know who could be the buyer of your business. Leverage the power of networking and grow your network to have more qualified leads who can become buyers for your business.
Keep your Financials Updated and Clean
Due diligence is unquestionably one of the most crucial steps in the business acquisition deal. It involves scrutiny and fair assessment of a business’s internal affairs — financials are the most important.
The buyer counsel and buyer have the right to analyze your financials, environmental and cultural values, contracts, etc. When you have tidy financials with everything in black and white (no gray areas), the prospective buyers will be more willing to buy your business.
Know What your Ideal Buyer wants and Their Plans for it.
Walking in another person’s shoes is not easy, but it is effective. If you can do this, you can know what your ideal buyer will look for in a business to buy it.
Let’s make a list of questions a potential buyer will be most interested in asking:
- What are the major revenue sources of a business?
- What are the profit margins of your business?
- Who are the customers?
- Customer turnover rates and satisfaction ratings
- Value of contracts
- How big is your target market?
When you know that the buyer will ask these questions, you can highlight the areas practically and focus on them.
Hire a Broker (or Work with Acquira)
Hiring a broker is undoubtedly one of the most effective ways of selling your business to the right buyer. It is also important because 50% of business owners who try to sell alone fail to sell their company.
Brokers have the right knowledge of the market that enables them to help buyers and sellers in the successful closing of deals. Your business sales dream team will include a broker, an accountant, and an attorney. You can get all 3 in 1 with Acquira.
Acquira helps small business sellers (buyers) and invests in the deals for a more systematized and successful sales process.
Why You Should Look at Acquira Vetted Business Buyers
Here are some reasons why Acquira-trained acquisition entrepreneurs can be the ideal buyer for your business:
Trained and Prepared Buyers
Acquira provides training and guidance to acquisition entrepreneurs about the acquisition process and all its intimate details in a way that guarantees a high success rate. So, they’re usually prepared to buy since they’re actively looking to start or grow their acquisition portfolio.
Ready to Buy
A business selling deal can take months and sometimes years to conclude. At Acquira, our vetted business buyers are ready to buy with your business. Also, our Acquira team will help secure financing and fund 30% of the business deal to ensure the business interests are integral to the new leadership.
Greater Chance of Keeping the Business Alive
The biggest fear of an entrepreneur when selling his business is: Will my business survive after acquisition?
In many cases, inexperienced buyers ruin the business. With Acquira, every deal is an informed decision that is backed by a series of training, mentoring, and guidance. Our buyers understand what they are going to buy and what to expect. As a result, there are greater chances that your business will survive with Acquira.
More Equipped to Grow the Business
Our buyers have the resources, financing, knowledge, and enthusiasm to continue the business they acquire. This equips them to be in the driver’s seat and grow the business they’re buying.
Finding the right buyer for your business who values your business and has a shared vision is very important. At the same time, it is difficult to identify the right buyers for your business.
The sellers who work in isolation to sell their businesses get 70 to 80% of their asking price. Therefore, it is preferable to work with an investment firm like Acquira to guarantee longevity, growth, and safeguarding of your business concerns. Reach out to a team member if you are interested in selling your business.
Acquira is a business acquisition in a box service. We help entrepreneurs buy businesses and we invest in them and their chosen businesses. We are here to help ensure that each business we work with is posed to make the biggest positive impact possible for its owners, employees, and community.