Business Selling Prep: To Whom to Sell

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Individual Buyers

Corporate downsizing has brought into the market business managers who are looking for new opportunities. These qualified managers see themselves buying and managing an established small business close to home.
Most of these individuals do not the have the financial means to purchase a business outright. They will likely seek financing through a SBA loan or in some cases, seller financing.
These buyers often request a transition period where the seller will be engaged for up to a year helping the buyer assume the full transfer of the business. The seller is usually paid a fee for these services.

The Competition

The competition may buy your business especially if you have a market niche or product-line that they want.
Sometimes it is financially feasible to buy an existing operation than to take the time and expense to build one up.
Buying you out will depend on the strength of your market position. The stronger the market position, the more likely the buyout.
The competition can secure the financing to buy you out. They may engage your services for a period to ensure your customers remain loyal to them.

Businesses Looking to Expand Their Current Line

Sometimes an established business in your related field is looking to expand their operations or to move into a new product line or service.
It may be a lot cheaper to buy an established operation instead of setting up their own operations in a new market.
These buyers generally have the financing to make a out-right purchase. They will likely request management to stay on for the immediate period.

Businesses Looking to Invest

You may find an investment group looking for investment opportunities. These investment teams will buy companies to divest or merge with similar businesses.
They will scrutinize a company very carefully. They buy companies that are in growing markets, have good financials, maintain key management, and meet their investment objectives. They will pay top dollar for a company if these basic elements are in-place.
Investment Groups generally request that management remain in-place for the immediate period. In some cases, they will bring in their own management team.

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