How To Find a Buyer for Your Business

You've invested a significant amount of your life building your business. You've reached a point where you want or need to sell it. You might be ready to retire, your health may not be able to support the time and stress required to run a business, or you may be ready to move on to another opportunity.

How do you find someone to buy your business so you can extract the wealth you have created?

Who Might Buy Your Business?

Small businesses attract potential buyers in the following categories:

• Individual buyers. These are often professionals leaving corporate careers who want to buy a business they can own, operate, and grow themselves. They frequently rely on SBA financing to pay a large portion of the purchase price.

• Competitors, suppliers, or customers. These are strategic buyers who already understand your industry and are looking to expand their geographic market or market share through an acquisition.

• Search funds and small private investors. These are entrepreneurs who raise capital from investors for the purposes of buying, operating, growing, and eventually exiting one or more businesses.

• Private equity funds. These are larger investment funds that may aggregate businesses in the same industry or build a portfolio of businesses to provide a return to their investors.

You can focus your marketing efforts and tailor your message based on which category of potential buyers you are targeting.

Deciding How to Market Your Business

There are several ways to find potential buyers, including.

• Engaging a business broker. An experienced broker will find and screen potential buyers, package and tell the story of your business, maintain confidentiality, manage the marketing process, and guide negotiations through closing, typically in exchange for a commission calculated as a percentage of the purchase price to be paid at the closing.

• Leveraging your professional network. Sometimes your accountant, financial planner, or lawyer already knows potential buyers or other advisors who do. Quietly spreading the word through trusted professionals can surface serious prospects while keeping the process discreet.

• Direct outreach. In specialized or local industries, you or your advisor may identify likely strategic buyers, such as competitors or suppliers, and contact them directly.

  
  

Note that regardless of the approach you pursue, confidentiality is critical throughout this process. You don’t want employees, customers, or competitors learning about a potential sale prematurely.

Don't DIY Your Search

Finding a buyer for your business is a challenging do-it-yourself project, fraught with risks. Experienced M&A advisors can help you navigate the process safely and successfully. Begin by discussing your desire to sell with your trusted advisors to obtain their input on how to find a qualified buyer and protect your interests during the process.

About the Author

Joel Ankney is The Sell-Side Lawyer. He leverages over 30 years of experience to help business owners throughout the USA navigate the process of selling their businesses, extracting the wealth they have created, so they can move confidently to the next stage of their lives.

Joel loves to talk about business deals. If you want to explore selling your business with Joel, you can contact him at joel@jalawoffice.com.