Think No One Wants to Buy Your Business? Think Again

Business owners often tell me that they are resigned to closing their doors when they retire because they don't think anyone would be interested in buying their business.

Many small business owners assume their business isn’t “big enough,” “interesting enough,” or “profitable enough” to attract a buyer. It’s a common and an understandable reaction. After all, you’ve spent years keeping the doors open, attracting customers, solving problems, building brand recognition and good will, hiring and training good employees, and doing whatever it takes to make payroll. You may think of your business as a job, rather than a marketable asset.

In reality, there are more potential buyers for small, well-run businesses than most owners realize.

The Changing Market for Small Business Sales

In the past, most small business sales were local transactions. Potential buyers might be a competitor across town, a key employee, a trusted family member, or a customer or supplier looking to expand. If you couldn't find a buyer from that limited pool, you might be out of luck.

Today, the buyer pool has expanded dramatically. Thanks to online business-for-sale platforms, SBA financing, and an increasingly sophisticated ecosystem of advisors, there are thousands of qualified buyers searching nationally for businesses like yours.

These buyers aren’t just looking for glamorous startups or high-tech companies. Many are actively seeking steady businesses that generate reliable cash flow and have loyal customers, such as construction trades, service providers, manufacturers, distributors, and niche business-to-business firms.

The Rise of Acquisition Entrepreneurs

One of the fastest-growing groups of buyers is made up of acquisition entrepreneurs, participating in what’s called Entrepreneurship Through Acquisition ("ETA"). ETA originated at the Stanford Business School years ago, and has been gaining momentum over the past eight years. Many of the leading business schools (e.g., Stanford, Harvard, Duke-Fuqua, Virginia-Darden, UPenn-Wharton, Chicago, and Georgetown) have ETA classes and clubs for their MBA students. Many of these business schools hold well-regarded ETA conferences each year to teach and discuss the ETA business model. In addition, other organizations, such as Walker Deibel's Acquisition Lab, New Majority Capital, and Search Fund Accelerator, teach, train, and invest in individuals who want to pursue the ETA business model.

Individuals in the ETA ecosystem are frequently MBA graduates or former corporate professionals who bring their own money and also raise capital from investors for the purpose of buying, operating, and growing an existing small business.

For these buyers, your business could be exactly what they’re looking for:

• A proven business model that already works.

• Trained employees who understand the day-to-day operations.

• Stable customer relationships and recurring revenue.

• Opportunities for growth that a motivated new owner can pursue.

ETA buyers are typically searching for businesses with $1–5 million in annual profits because a business of that size can be big enough to sustain professional management, but small enough for a hands-on owner-operator to lead. Many are willing to move anywhere in the country for the right opportunity.

You Don’t Need a Perfect Business, You Need a Good Story

Even if your business has imperfections, such as customer concentration, founder dependency, or outdated systems, that doesn’t mean it’s unsellable. It just means that part of your preparation will involve identifying those issues and developing a plan to address or explain them.

A knowledgeable sell-side advisor (broker, Certified Exit Planning Advisor, CPA, or attorney) can help you:

• Assess your business’s likely market value.

• Identify realistic buyer profiles.

• Prepare your business and materials to attract qualified interest.

When properly positioned, even businesses that seem “ordinary” to their owners often generate multiple offers from serious, motivated buyers.

The Bottom Line

If you’ve built a business that consistently earns money, employs people, and serves customers well you’ve built something of value. The right buyer is out there. Sometimes, it just takes the right story, the right presentation, and the right team to help them find you.

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.