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Successfully sell your business to the right buyer by Andrew Rogerson
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Successfully sell your business to the right buyer |
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Business,Business Opportunities,Small Business
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If you plan on selling your business, it will help you to understand the different types of buyer. Each buyer who inquires will have their own unique reason to want to buy. By talking with the buyer, understanding their needs and then placing them in one of the categories below, will help you understand what they are looking for so you are better prepared to discuss and negotiate the transaction. Individual Buyer This is generally one person with good financial resources and background or experience for managing and leading a particular business in a particular industry. This type of buyer is usually looking for a particular business that is financially healthy. They are looking for a return on their investment and some flexibility in lifestyle choices. They also believe they can buy and at least maintain the current performance of the business or take it to a higher level. Corporate Executive This is a buyer who has many years of service with a large corporation and has concerns that downsizing may occur. In some cases, they are getting older and have their retirement money tucked away and would like to see what it would be like to run their own business. Franchise businesses are particularly attractive to them as they like the structure and organization that comes from working in this business model. Existing Employee The buyer of a business can be an existing employee. If the business has a strong cash flow and the employee is able to put together a small down payment with the seller carrying back some of the financing, this can be a mutually beneficial arrangement. SBA financing may be an option here—especially if the employee has management expertise. Investment Buyer or Financial Buyer All buyers want a return on their investment. However, with investment or financial buyers this is their primary motivation. Their ability to get financing on as large part of the purchase price as possible is also motivating. They have less interest in the type of industry and many of the specifics of the business operation. Synergistic Buyer This is usually a company and their purpose of buying the business is their belief that joining the two companies will produce more, or be worth more, together than if the two companies were to remain separate. Industry Buyer This type of buyer is often a competitor or owns a very similar operation. They know the industry well and therefore see little value in paying for the expertise and skill of the seller. Strategic Buyer Like the synergistic buyer, the strategic buyer is usually a business owner with a goal to expand their current company. They leverage their expertise to enter into new markets by acquiring market share and then increase market share through the acquisition. Their strategy can also include deploying a new technology and/or eliminating a competitor or some competitive element. Andrew is a 5-time business owner and his expertise includes helping owners sell and/or buyers purchase a business, new entrepreneurs buy a franchise, certified machinery and equipment appraisals and business valuations. His credentials include the CBI designation from the IBBA and the CBB from the CABB. Andrew is also a published author on four books on buying or selling a business available at Amazon.com. If you would like more information about selling your business, visit my website; http://www.Andrew-Rogerson.com and order a copy of my book Successfully Sell Your Business: Expert Advice from a Business Broker.
Related Articles -
Andrew Rogerson, Sacramento Business Broker, buy a business Sacramento, sell a business Sacramento, buy a franchise, business appraisal, ,
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