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Tips on Finding the Best Buyer For Your Company


Many companies on the market are attractive to buyers, especially if they have a solid history of profit-making, a large and loyal customer base, competitive advantage, and significant growth opportunities. If you have such a business, then you may be looking beyond basic valuation to other criteria that will ensure your business will be in good hands.

 

Get A Negotiator On Your Side.      

Hiring a broker ($10 million or less), a mergers and acquisitions professional ($15 million+), or an investment banker (large public companies) can help you find the appropriate value for your business, as well as the perfect buyer. Brokers will weed through prospects and tap into their vast and clandestine networks to find the right buyer, without wasting your time.   

 

Why The Buyer Matters

What good would a prospective buyer be if he couldn’t finance the sale? What if you relinquished control of your company only to find you’ve made everyone’s life a living hell under the new management? Wouldn’t you hate to see the business you’ve poured so much blood, sweat and tears into totally fail within a few years of selling? Finding the right buyer matters! You’ll find there are strategic buyers who see your business as a critical component to their business’s long-term success, and there are financial buyers who are interested in your company’s profits and stability. 

 

Where To Look

Often the best buyers are right under your nose. Do you have ambitious employees? Do you have suppliers, competitors, or customers who may have the capital and the ability to run your company? You may also try advertising in trade publications, newspapers, and websites like BizBuySell.com or BizQuest.com. Many people opt to work through brokers because these trusted professionals will sift out prospects confidentially, so you don’t lose ay clients, vendors or employees in the transition.

 

How To Pre-Qualify

Before sharing the details of your sale, make sure standard documents are signed – like a confidentiality agreement and financial background form, for example. You’ll want to make sure the individual has no history of bankruptcy or judgments against him or her. You’ll also want to know this person has the business and management expertise necessary to run a company like yours. Look for someone who has people who have worked for him or her for many years. Run a Google search to ensure there is no history of scandal or arrest – and even to read about some of the charitable good he or she may have done.

 

Get Your House In Order.  

Before you sell your business, make sure your books are in order. Prospective buyers will be scrutinizing your profit-and-loss statements, balance sheets and full tax returns dating back a good three years. You’ll also want to offer a dossier on projected future earnings and create a compelling executive summary that tells buyers about the essential elements of your business.

 

Enter The Process With Reasonable Expectations.

Expect that the sale process will take 12 months to complete. Expect that you may not get exactly what you’re asking. Expect that a buyer will want to take everything he or she sees upon entering your building – unless it’s explicitly stated what is your personal property. Expect that people may try to make piece-meal offers for certain parts of your business, but not others. 

 

 

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Resources:
INC: 6 Tips For Finding The Best Buyer For Your Business
Entrepreneur: Bringing In The Right Buyer For Your Business

 


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