What Do Buyers Look For In A Business For Sale?
When a person is looking to buy a business, there are various things they look for. Some buyers are looking for an extremely specific business to fit their needs. These buyers can be some of the best buyers because they may pay more if your business fits the specifications they are looking for.
Knowing what business buyers want is essential to selling your business. It can help you to effectively market your business. Knowing what buyers want in your business can also help guide what you are investing in.
Effectively marketing your business for sale helps to attract the right buyers to your business. To maximize effectiveness we need to provide them with the information they are looking for in a confidential manner.
When selling your company it is a great idea to try to think like a buyer. What would make you want to buy a business? All buyers want a successful business that is growing, but there is more to a business than growth.
Is your business designed to continue that growth? Is your business located where your buyer is located? Is your business’s industry what a buyer is interested in? While you cannot change your industry, it is a large factor in finding qualified buyers.
Business Buyers Care About Your Business’s Industry
Whether you are buying a business or starting a business, you want it to be in an industry you are familiar with. The other reason a person would want to buy a specific business in a specific industry is to merge it with their existing business.
The interested buyer would either be looking to purchase the same type of business as theirs or purchase a business that will cut out production costs for their company. No matter the reason, specifying your business’s niche will quickly focus on getting the right interested buyers.
Buyers Care About Where Your Business Is Located
Many buyers do not want to move when purchasing a business. Additionally, business owners might look for a specific type of business at a certain location. For instance, a buyer might be looking for a transportation business located in Pennsylvania or Tennessee due to their optimal location for transporting goods.
Most of the time buyers are interested in purchasing a company located near them. This makes sense because they will already have local business connections and not have to move to a new location.
On the other hand, there are certain buyers that want to purchase a company simply because of where it is located. What these buyers are looking for is expanding their market reach. These buyers can also be looking for effective locations that will lower certain costs.
The Price Of Your Business Can Interest Buyers
Buyers, especially frequent business buyers, are usually searching for a profitable sale of a business. This is why it is so important to get a business valuation to know the worth of your company. If the economy is down or your business is not in demand, it might be a good idea to lower the price of your business.
Buyers are always balancing out the risk of a purchase. Buyers of your business are interested in the location, industry, and listing price of your company. Lowering the price of your business also lowers the buyer’s risk. While we want to sell your business for the full price, we will recommend lowering the price of your business in certain scenarios.
Buyers Look At A Business’s Annual Income
As a buyer balances out the risk of making a purchase, the annual income is the next major indicator of whether your business is worth the investment and risk of buying. A buyer wants to make an overall profit from purchasing your business. If the annual income does not pay off the business loan in a timeframe they see fit, it can be a major deterrent for purchasing your business.
It is important to communicate your business’s cash flow. Some businesses have a large amount of cash flow in order to operate while others need to invest less upfront. Knowing your business’s value and the cash flow of your products will help interested buyers to understand what they are purchasing.
This is why other factors are so important in selling your business. Rarely does selling a business break down to just numbers. If your business is within their industry and can cut their primary business costs, they will see even more profitability in a vertical merger.
Knowing what a buyer is looking for is so important. Knowing what your business has to offer can help you communicate and negotiate the sale of your business more effectively.
A Business’s Marketing Strategy Can Interest Buyers
A powerful website, branding, or general marketing presence can interest a business in purchasing your company. For instance, a large IT firm may be able to target an older demographic effectively but is unable to reach a younger demographic. Suddenly they find an IT company for sale that is targeting a younger group of people and startup businesses effectively with online marketing.
This merger is extremely beneficial for the company that targets the older demographic because they will be able to reach a wider range of customers. Your business’s marketing is one way to increase the value of your business before you sell your company.
Buyers Love Businesses With Recurring Clients
Recurring clients at your business shows your company is a good investment for buyers. If your business structure shows a guarantee of return business, a buyer will be very interested in purchasing your company. For instance, environmental cleanup companies have a lot of contracts with different manufacturing and production companies. They will regularly go to those businesses and take environmental waste that those companies produce.
If the environmental company has existing relationships with businesses as well as a transportation business to transport the waste to their facility, a business would be interested in purchasing your environmental company because they will not be starting at square one looking for clients.
Your Business’s Assets Are A Key Selling Point
A person interested in a specific business’s assets might be seeking out a liquidated business, but specific business assets can interest a buyer, especially if it is an asset or setup that other businesses do not have. Many buyers are interested in business assets that cannot easily be purchased but require time and development. For instance, technology or specific processes or training. These assets can become a key selling point that makes your business unique.
Something Unique About Your Business
Is there something unique about your business that your competition wishes they had? A unique aspect of your company is a major selling point. If businesses listed for sale only had their price, location, and industry, buyers would look at a list of 10 construction companies for sale and just buy the cheapest one. If one of those businesses listed something unique about their business, they would be much more likely to sell.
This is something we try to do at Synergy Business Brokers to attract interested buyers to your business. When we meet with you and your business we provide a confidential consultation. During this consultation, we want to know what makes your business unique. Ways past businesses we have sold were unique:
- Manufacturing business patents
- Unique and desirable location
- A large amount of property
- Real estate market value
- Explosive growth in a business
- Recurring clients making up a majority of business
- Businesses with large profit margins
- Award-Winning Businesses
- Environmentally friendly businesses
- Employee Run Businesses
- And many more
Sell Your Business Through A Professional Business Broker
Sell your company through Synergy Business Brokers. We specialize in specific industries and help sell your business as effectively as possible. Contact Synergy Business Brokers, a top business broker in the United States.