After you’ve made the decision to sell and put your business on the market, how do you get your perfect buyer to notice you? When you find the right buyer, it’s a match made in heaven. You’re on the same page, the sales process is amicable and smooth. You both want to make a success of the deal and have the best interests of the business at heart. Choose the wrong buyer and the deal can be fraught with challenges, take much longer than anticipated, and even risk collapse.
Finding the right fit, first time, is what every buyer is striving to achieve. In this article, we’ll show you how.
What does an ideal buyer look like?
At Uscita, we believe there is a perfect match buyer for every business. They may not emerge immediately, so we work our contacts, and yours, to track them down. First and foremost, the ideal match needs to have the financial means and stability to buy your business. This requires careful scrutiny during due diligence to make sure their financial claims and funding sources are genuine.
An ideal buyer will have relevant sector knowledge and experience, either in the same or a related industry. There will also be clear cultural alignment and respect for the business and its future in terms of protecting employees, customers and other stakeholders throughout the sale process. While the majority of vendors don’t want a buyer to steam in and break up their company, not every vendor is precious, and not every business is in the best position to dictate its future. Your ideal buyer will have integrity and be open and aligned with your point of view.
How to get your perfect buyer to notice you
As you prepare to sell your business, you should take advantage of media opportunities to raise the profile of your business and add value. Done correctly, PR and marketing can add to the bottom line and make buyers sit up and take notice. Entering awards (whether you win or not) is a great way to showcase your achievements, while accreditations offer peace of mind. These all add up to points on the board when buyers are doing their research and due diligence.
The Value Builder System™
Uscita was an early adopter of the Value Builder System™ – a statistically proven methodology for increasing company value. It allows us to benchmark any business against the actual sales data of thousands of companies worldwide. The results enable us to assess business value and pinpoint where to focus your efforts to increase this.
The System also provides tools to assess personal and financial readiness to exit, and to create an exit plan that anticipates each stage of the sale process. Learn more about the Value Builder System™.
Build a shortlist of potential buyers
In a perfect world, who would want to buy your business? This is key to developing your sale strategy. As we work through the Value Builder process, we ask a vendor to compile a list of up to 10 potential trade buyers. These might be:
- Competitors
- Businesses in your sector or in related sectors
- Complementary businesses which could create new market opportunities
- People who have enquired if you were for sale in the past.
You might think coming up with ten names will be a challenge. In fact, the most prepared vendors have already begun this thought process before we speak about it. You know your industry and will be aware of people in the market looking to acquire. If you struggle, an exit consultant or business broker will have plenty of connections to add to your list.
Of course, not every sale generates a long list of prospective buyers. It all depends on the size of your business and the level of confidentiality around the sale. Some sales take a more targeted approach. As a general rule, an ideal buyer will be no bigger than 20 times the size of your business.
When your business is in the best position to go to market, the list is your starting point to make contact, start the conversation, and gauge interest levels.
So, what should you say in those initial conversations?
Create tailored scripts
To help start the conversation, we work with our vendors to prepare personalised scripts for each of their ten potential buyers. First impressions count – it’s important to position your business to pique a buyer’s interest.
Start with research. You need to learn as much as you can about a potential buyer’s business and imagine all the ways they could benefit from buying yours. Think increasing market share, cost savings, improved margins and access to new markets and customers. Build a set of convincing arguments and you’ll leave them eager to learn more about the opportunity.
Know your number
Before you or your broker instigate those conversations, you have to be clear and upfront about your expectations of business value. Knowing your minimum number is a crucial part of preparing your business for sale. We discuss this in more detail in our free resource, The Long Goodbye, which you can download here.
Avoid the wrong buyer with Value Builder Coaching
Do you know how much you want to sell for, and how to make your business attractive to buyers? What would potential buyers think about your business if they approached you today? Planning your business exit and connecting with your ideal buyer helps reduce challenges when selling.
If you’re looking to build business value, seeking honest, realistic valuation advice, or want to make your business more attractive to buyers, we’d love to hear from you. Assessing readiness to exit and identifying the right buyer are all part of the Uscita coaching service. Get your Value Builder Score now or book a discovery call to talk through the process and how it could work for your business.
