When a business owner is ready to turn the keys over to a new owner, it’s time to find a buyer. But selling a business is not as simple as selling a used car on eBay. It takes the same kind of marketing strategy that one uses to market its goods and services—yet with more subtlety than the usual strategies.
To find potential buyers for a business, an owner needs to advertise it for sale on platforms where potential buyers would congregate—either online or off. Industry journals, trade magazines, all are places in which an owner might find willing buyers.
Word of mouth, too, among the owner’s colleagues may also produce fruitful results. If a person has expressed past interest in buying the business, the owner may want to give her or him a call to see if they are still interested.
What an owner doesn’t want to do is to spread flyers around town, advertise on television or radio, or putting a “for sale” sign in the window. Although those tactics may work well for selling products, the strategies may scare away customers for whom a change in management may cause them to go elsewhere. After all, a business’s main selling point is its customer base.
The owner should use discretion when you speak about his or her plans to sell. Employees might bolt; creditors might get nervous, as may suppliers. Here are some steps that can help a business owner best market his or her business.
Define the Target Market
Just like in marketing goods and services, a business owner should look at the characteristics and demographics of likely buyers. Learning more about them will give one a better chance to reach them.
What types of qualifications would a buyer need to buy the business? For example, if the business is a medical office or a beauty salon, a buyer would need special licenses or credentials to set up a practice. How much money must the person earn per year—or have in savings—to buy the business? Would a group of investors be interested in buying the business, or is it more appealing to a sole proprietor?
Find the Best Way to Spread the Word to Likely Buyers
With each type of buyer, there are ideal ways to reach them. For a local buyer who is interested in generic businesses, an ad in the local paper (as long as the owner gives no identifying details to spook the public), a local broker, or online “business for sale” ads may work best.
If the business would appeal to a group of buyers outside the business’s area, the owner may have better success with nationwide “business for sale” sites. Factories that sell and ship goods all over the country would fall into this category, as would interstate shipping firms.
If the target customer is a business or person who wants the type of business the owner has (such as a doctor or group of doctors who want to buy a practice to add to their network), industry-specific magazines or online journals would be a good place to network and advertise. Business for sale ads, too, may attract their attention. One-on-one contact, too, might be worthwhile, providing the owner has several potentially interested people in his or her target customer group.
On the other hand, an investor group looking to buy a business of the owner’s type would best respond to industry publication ads or one-on-one inquiries. Again, it pays for an owner to forge plenty of industry connections well before deciding to sell to have a broader reach inside the industry.
If the most likely buyer is a competitor or one of the owner’s suppliers, a confidential one-on-one phone call or email is most likely to produce results. If, however, the business is a franchise, the best route to a successful sale is through the parent company, since there will usually be legal barriers to selling the business on one’s own.
Network with Local Brokers, Bankers, Attorneys, and Accountants
If the business is a local one with plenty of local interest, it pays to take a few local professionals out to lunch to see if any of their clients would be interested in buying the business. Be sure to ask them to keep the news of the desired sale confidential until the owner and buyer close the deal.
Small Businesses Benefit from Business for Sale Website Ads
Restaurants, retail shops, or independent convenience stores often do well by advertising on sites such as BizBuySell.com and similar sites. Although some customers may get wind of the news, chances are, only people interested in buying local businesses will see the ads. The bonus—the owner will reach a group of people actively looking to buy a business, most of whom are financially able to do so. Be sure to include the size, approximate or exact location, capacity, and how the business has performed over the past few years. Photos are a must, unless the owner doesn’t want anyone to recognize the business.
Prepare a Brochure to Leave with Prospective Buyers
When potential customers contact the owner for an appointment, the owner should have full-color brochures available for the customers to take home with them to mull over. In these brochures, the owner should post attractive photos that point out the finest features of the business buildings and grounds, complete financial figures, utility bills’ averages, research on the local competition and target market, and the goods and services the business offers for sale.
Include samples of labels and logos the business uses to promote its products, as well as links to the company website, blog, demo or product debut videos, audio or video advertisements, and other publications to show potential customers the company’s brand image, voice, and tone. Having those materials available shows that the company for sale has done its homework to attract customers and retain current ones.
Business owners who follow these tips for selling their business will have a better chance to sell their businesses for more money—and to set up the new owners for success!