Aligning to What Buyers Need Achieves Your Goals for a Sale

By Trip Holmes

Why do people buy and sell businesses? The answers vary from company to company, but there are several common driving forces. According to research, acquiring entities decide to buy when:

·       They want to add new markets and customers.

·       They want to diversify their portfolio of products and services.

·       They want to acquire new talent or leadership.

Business owners generally decide to sell when:

·      They’re ready to retire or be replaced by a successor.

·      They’re facing overwhelming competition.

·      They get the opportunity to sell at a great price.

Taking these motivations into account will go a long way in helping you secure an attractive sale price for your business. Sellers need to try to align with what the market needs; acquiring entities are looking for new products and services, new markets and customers, and new talent/leadership. Have you thought about what your business brings to the table in these areas?

If not, you’d be wise to start pondering this question soon. The earlier you start, the better: Building in these areas will make you more attractive to potential buyers, and the closer it gets to sale time, the less time you have to develop your business. Many business owners get caught up in thinking about what they want out of a sale, and what the buyer can offer them. But, conversely, the first step toward getting your dream offer is to ask the opposite question. What can you offer to the buyer!

In addition to giving you more time to develop your business’ strengths, early planning will prevent you from falling into a hasty deal simply because you got caught up in life circumstances. Studies show that about 65 percent of business owners have a transition plan in place. Business owners describe the most important factors that affect transition timing as: 

·      Family/personal circumstances

·      Personal financial situation

·      Mental or physical health

·      Current valuation of business

·      Regulatory environment/impact of policy changes

Most business owners don’t want to let these circumstances dictate when and for how much they sell, but without a strong plan in place, it’s nearly impossible not to. For the 36 percent of business owners who do have a good plan in place, selling is a very different experience. They can actually try to control the sale by their valuation of the business – ultimate control. And when you’ve put your life’s work into something, having control over its sale is of paramount importance!

You deserve a fair sale that will enable you to reap the benefits of your hard work. So start planning early, align your business with what the market needs, and give yourself time to develop in crucial areas.

Beginning to prepare for or think about the sale of your business? For over 35 years, Sabre Capital has served middle-market family business owners across the Carolinas and Virginia. We’re well-equipped to help you along your business journey, ensuring that your goals are achieved and your legacy preserved for future generations. If you’re looking for an experienced business broker to work with you and your team, look no further. Contact us today.