Finding the Right Buyer
Follow these tips to prepare your business for sale and find a buyer who will make an offer you won’t want to refuse:
- Consider your successor.
Who takes over when you step down? If a family member or current manager wants the job, create a succession training plan to educate the new boss before handing over the reins. Research from PwC found that only 58% of American family businesses have succession plans, and even most of those are informal.
A buyer who wants to run your company after your departure will be looking for a healthy business that will survive disruption, which is a concern for 37% of the U.S. family business leaders PwC surveyed. More confidence in the health of the business means you can command a higher price. In order to maximize your profit, make sure employees at all levels are educated on the digital skill sets they’ll need for the next five years.
- Explore your broker options.
If you intend to use a business broker to assist with the sale, be sure to interview potential brokers like you would interview a new hire. Does this partner have your best interests in mind? Does he or she understand what makes your business valuable? Check with people in your professional network to get some references. Good brokers should be able to tell you all about the marketing strategies they’ll use to find a buyer.
“Assuming you choose wisely, this person will know how to craft a unique and compelling narrative about your business to inspire people to pony up the necessary dough—all the while helping you navigate the emotional ups and downs that accompany the selling process,” says James Moran, founder and managing partner of ValueStreet Equity Partners, a San Diego-based small business investment firm.
- Find a prequalified buyer.
To take the guesswork out of your business sale, find someone who already has the cash—or at least enough credit to borrow it. Regardless of how tempting an offer may sound, reserve your celebrations until you confirm through the proper channels that your buyer is good for the money.
Many banks require the seller of the business to provide some of the financing for the deal. If you take this route, make sure your prospective buyers can afford to keep up their end of the deal and know how to run the business. If not, you could end up on the hook for the difference.
Once you get your business into selling shape, you can take your time to vet potential buyers. Don’t get into a hurry to sell. A few months of pickiness now could save you years of headaches and regret.