The Best Strategies for Finding a Buyer for Your Business
You’re planning to sell your business. You’ve organized your financials, done everything you can to maximize value, and are sure your team is strong and capable of navigating the transition. Now what? A capable buyer is all that stands between you and a successful sale. So how do you go about finding one?
A well-marketed sale process can greatly maximize value for your business. This means you need to get a no-names marketing teaser to as many qualified buyers as you can. A higher number of interested buyers can ultimately result in a higher offer. While some may worry that this increases the risk of confidentiality breaches, the assistance of a professional team and a diligent confidentiality protection strategy can go a long way toward mitigating these risks.
So what are the best ways to find buyers for your business? Ultimately, it comes down to three marketing channels.
With this approach, you directly contact all potential buyers. So how do you get that list? By performing diligent research on an M&A database. These lists identify parties interested in and financially able to complete a transaction, so much of the initial work is already done for you.
Intermediaries in relevant industries can reduce your workload and make introductions to qualified buyers. These intermediaries include, but are not necessarily limited to, lawyers, investment bankers, M&A advisors, and financial bankers. Some M&A firms intentionally exclude intermediaries. This is because they fear confidentiality breaches. They also may wish to avoid sharing their firm’s information with potential marketplace competitors. So if you hire an M&A advisor, you may want to do so only after going through other intermediaries. Alternatively, you can choose to work only with M&A firms that work with other intermediaries. Some firms believe that doing so creates real value for their clients, so much depends on whom you hire.
This approach involves distributing a brief teaser to relevant social networks. This allows you to reach a wide audience of M&A buyers. Many M&A firms don’t embrace this approach. Some worry that a widely marketed deal is a lower quality one. That’s not always true. Even the best research won’t include all prospective buyers. So a wide audience is vital for a profitable sale. The indirect approach allows you to reach potential buyers you might not otherwise have considered—including many buyers you and your team may not even know about.
No matter which combination of strategies you utilize, the cornerstone of a fair sale is a skilled team. The right M&A lawyer can carefully draft documents that protect confidentiality. Financial advisors ensure your business is ready to go to market. And a skilled M&A advisor can help you prepare for due diligence and create value both before and after you begin actively marketing your company. Each of these professionals may also have deep industry connections, making them a vital asset not only for protecting your interests, but also for marketing your company.
The Hatteras Group is a collaborative team of professional intermediaries and advisors, located in North Carolina, leading business owners and entrepreneurs as they navigate the complex and often emotional process of selling or buying a business.