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If you’re looking to sell your business, it’s essential that you determine the type of exit and buyer you want so you can market the business accordingly.
Determine Your Business Qualities
Before trying to attract the right buyer, create a list of the company’s positive attributes that make it an attractive investment opportunity. This will help you to create adverts, presentations, and pitches that highlight these positives and make the business case more compelling. Namely:
Location: are you relocatable or do you have loyal local customers?
Scaleablity & Growth: can you expand into new markets or scale easily? Have you identified new products or markets that will allow you to increase revenue?
Reputation: do you have positive reviews and testimonials?
Profit margin: is your profit margin in line with industry averages? Can it be improved?
Asset value: what equipment, property or intellectual assets does the company own?
Management team: is the company overly reliant on an owner wishing to exit or have you ensured a smooth handover process with a strong management team?
Loyal customers: are you over-reliant on specific customers, or can you easily weather the loss of a valuable client?
Flexibility: can your business easily adapt to changing market conditions such as an economic contraction or does it have cash in hand to do so?
Once you have determined the strengths of your business, you need to identify the type of buyer who would find such a proposition attractive.
Create your ideal buyer profile
A buyer profile helps you to define which acquirers will have the means and the will to purchase a business like yours, while achieving your post-exit objectives, such as staff retention. A buyer profile might include preferences for:
Ethical positioning (you may be willing to take a lower valuation to secure future jobs)
UK or foreign buyers
Synergies
Monetary position such as cash-rich instead of heavily leveraged
Sectors of interest
Minimum revenue requirements
Builders of businesses rather than “restructuring” private equity firms
Draw Up A Target List
Once you have drawn up the ideal characteristics of a buyer, you can create more detailed targets, possibly drawing from the following sources:
Competitors
Synergistic companies that are expanding
Foreign buyers moving into the UK market
Key customers that could save money by acquiring your business
If you have significant revenues or are in a very specialist space, the range of potential buyers could be quite narrow. Many business owners will be able to easily identify their top five potential acquirers, but it is wise to research the market extensively to reach a wider pool, including international targets if that is of interest. Brainstorm what concerns potential buyers may have so you have a compelling answer for every question.
Marketing Your Business
After creating a buyer profile, you can craft a compelling advert to market your company on business sale directories. Use positive, upbeat language in your advert, emphasizing the potential to increase revenues and profit. In our experience, some sites have a far better return on investment, and the best outlet varies according to the type of business. It pays to research the best sites for your sector or use a business brokerage to advise you accordingly.
When advertising your business for sale, in most cases it makes sense to maintain confidentiality. You don’t want your competitors flagging your potential sale to your best customers as this could affect their relationship with you.
Using Your Network
Another great way to attract potential buyers is through your network, albeit discreetly. LinkedIn Premium also gives you the advantage of contacting target acquirers directly. By reaching out to people you trust who might work in these businesses, you can prepare for any pitch more effectively as well.
Keeping a Buyer’s Interest
It’s vital to be prepared before advertising your business or approaching potential buyers. Make sure your financials, contracts, manuals, handbooks, insurance, and legal matters are all up-to-date and easy to review so you can answer any buyer questions promptly. One of the fastest ways to lose the interest of a good buyer is to take too long in responding to their questions.
Getting Professional Help
Attracting the right buyer can take time and involve a steep learning curve. If you are focused on running your company, business brokers can help speed up the process and find the right buyer much more quickly. We know the best ways to advertise businesses for sale, where to find the right buyers, and how to pitch the business to interested parties on your behalf. The best business brokers have an extensive database of ready buyers keen to invest in the UK market. Our team can quickly match most businesses with a great fit.
Interested in finding out more? Contact our team today for more valuable advice or to get a free business valuation from our business sale experts.