If you are thinking about selling your business, there is a question to consider: ‘Who will buy my business?’ It’s important to think about this before making the decision to sell.
A better understanding of what type of buyer would be most interested in your company and its specific needs could help position it for an optimal sale price.
High Net Worth Investors with Industry Experience
High net worth investors with industry experience are often business owners in their 50’s and 60’s who have recently sold businesses for substantial amounts.
Left with time on their hands, they typically don’t want to retire early – instead looking for a smaller business which shares the same specs as those of the company from whence they came: one where they can bring veteran expertise like contacts, financial backing, or input into management decisions.
Precision engineering is a sector that typically sees this scenario. It is often buyers looking for companies turning over $1m to $4m, with their goal being 3-4 acquisitions in order to build one group reaching up to the range of 15 million dollars or more.
Trade / Strategic Buyers
Trade buyers are known to be strategic companies looking for ways to expand and diversify. They often offer the best value, as direct competitors will not always have a shared goal with you in mind when they make an acquisition bid.
The best trade buyer is one who has specific goals that align with your own needs such as expanding into new geographic regions or adding complementary services so cross selling can occur between merged client bases.
We have completed a number of trade sales for our buyers in the B2B service sector. Industries we’ve worked with include IT support, commercial cleaning services, marketing agencies and accountancy practices.
Our sellers may come from these sectors themselves or have an understanding of their specific challenges – which is why they need to work with someone who understands them on both sides!
Most transactions that we complete are for professional businesses in the B2B service industry such as IT Support companies, Commercial Cleaning Services & Marketing Agencies (to name just three).
With this type of business buyer’s need industry knowledge so it makes sense they should buy through us if they want excellent customer care combined with expert insights into how best to grow their new investment.
Private Equity with Management Buy-in
Private equity with management buy-in is a type of investing that involves the ownership and control by private investors. This usually includes businesses who have annual revenues over £5m, or net profit over $1 million per annum.
A growing number of small private equity firms are looking at other industries outside their traditional market sector such as technology start-ups or smaller companies in need of expansion capital to grow into new markets before being taken public; these buyers will often look for industry experts from within its own pool to take charge post acquisition if they’re not able to find someone suitable on the company’s current staff roster.
Our niche engineering and B2B servicing sectors are what private equity firms look at when buying a business. They come to us, or we go to them.
Entrepreneurs with Spare Cash of $200k to $1m
The entrepreneurial types who have $200,000 to $1 million in cash are usually classified into two groups:
- Those with a successful background and corporate experience whose current pursuits include finding new interests for their spare money after leaving the company.
- Serial entrepreneurs that build businesses over three or five years before selling them off so they can start anew on something more interesting than property holdings of just sitting on it.
- Start taking action to find potential buyers by researching types of businesses that are in demand, connecting with people who may be interested and getting the word out through social media, expos, conferences and networking events.
- Connecting with other entrepreneurs will also help you get a better idea for what your business is worth. Many entrepreneurs are experienced sellers that have already done this work before selling their own companies.
- Keeping up to date with the movers and shakers of your industry is always a good idea. Reading relevant news, publications, market reports and related business press could point you in the direction on companies that are active buyers for other businesses like yours.
- Lastly if there isn’t anyone else in your network willing to sell their company alongside yours it might be time consider hiring a business broker – a good one!
When you engage a business broker you don’t have to do anything, really: just pick a qualified broker (hint – my contact details are below).
Business brokers are there to answer all your questions about finding buyers or what it takes to sell a company.
If you are in South East Queensland, call me if you want any advice on how to best determine which type of buyer would be right for you; Marc Phillips know this stuff better than anyone else!
Who Will Buy My Business?
Sydney born, having spent six years serving the community as a New South Wales Police Officer before deciding to relocate to the UK where he pursued his passion for sales, the financial markets and the real estate industry.
15 years as a licensed agent, ten of those years in fast-paced markets of the USA and the UK, Marc is an expert in business brokerage.
Business owners are invited to consider Marc when seeking a business to buy or sell in Queensland with local knowledge in the South East Queensland market including Brisbane, Gold Coast, the Sunshine Coast and the Darling Downs.
Local knowledge and surgical negotiation skills mean a keen eye on every detail. Marc has a profound knowledge of legal frameworks in all aspects of business acquisition and sales process.