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Successfully sell your business...to the right buyer

Guest post by: Andrew Rogerson

Article Overview: 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. Let’s find out what’s important to each type so you are better prepared.

Successfully sell your business...to the right buyer

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.

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Article Tags: Andrew Rogerson, business, Business broker Sacramento, business escrow, business for sale, business plan, due diligence, exit plan, franchise, franchise for sale, Murphy Business and Financial Sacramento, Sacramento business broker, Sacramento business ownership, sell a business, Sell a business, succession planning



Related Forum Posts
How do you set a value on a business? - Hello there! I have a friend that's looking to sell their business. I would like to know how a business gets valued. Can someone help me here? Here's some fairlyaccurate numbers: Gross sales: $153,000 (3 year avg) Income: $75,000 (3 year avg) I've heard that there's a ratio that can determine the value. Does anybody know what it is? The buyer wants to see P&L's. Is their some type of disclosure agreement that protects the seller... How is this typically done? After all, the buyer is a competitor... Buyer has suggested deposit, then pmt plans. I'm under the impression that this is common practice in the sale of a business. If so, what's the best way to approach this proposition as a seller? Thanks in advance for your feedback!
Re: I think Craigslist is better than Ebay - [quote="Takuya":qrwga8m5]But i agree with you, it's nice having it to sell it locally.[/quote:qrwga8m5] While selling locally is always best, you can still sell internationally via Craigslist and that's why it's better than Ebay. Craigslist has no seller fees (but watch out for PayPal). If a buyer is willing to pay for the shipping cost, then why not sell to them? Just be sure to explain the no refund policy and shipping insurance coverage.
Selling my business.... - I am looking to sell my business. It is a profitable business but I want to get out because I am burnt out after 7 years(since I was 17)......... I am almost ready to sell(making the proper preparations)..But I'm unsure about my lease with the landlord. He doesnt seem to want to resign.. I am worried about how marketable my business is with only 2.5 years on the lease... When I sell my business, does my landlord have to resign with whoever my buyer is? Thanks in advance... G.
Feedback is Important - I made transactions on ebay and its quite a nice idea to sell or buy on ebay but it don’t let you feel the product otherwise it is a good idea to buy and sell products online, its good to leave or get feedback as it will give others to see your history on the site that how good buyer or seller are you.
Re: Selling my business.... - Sounds like you're in a tough situation. First things first, you really need to get some clear answers from the landlord. If they're not willing to extend your lease, then you're obviously in a pickle. I would do everything I could to negotiate a new lease. If landlord is balking at renewing the lease, find out why; Is it because they're looking to increase rents? Have you had problems with them? Are they planning to remodel? The landlords answer may not be what you are expecting and could possibly be a simple hurdle for you. I would try and have a face to face meeting as well... you'll learn more from their body language and pleading your case is going to have more impact. Without an extension on your lease I can't imagine how you're going to convince a buyer to take over your business. [quote:cbrn6le2]When I sell my business, does my landlord have to resign with whoever my buyer is? [/quote:cbrn6le2] The answer is probably no.


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