The title of this article is a question that we like to throw out to the attendees at our exit planning conferences. Usually, the entire room gets the answer wrong because for many, the only buyers they consider are often their key competitors.
Now in the end, you may find that the optimal buyer for your business ends up being a competitor. However, at the beginning of your exit journey, you must start with an open mind and cast a wide net because only then will you have the peace of mind knowing that if you do sell to a competitor, you used the leverage of an auction process to get an optimal deal from that firm.
The key term above: auction.
The reality is far too many business owners accept the first offer they get. Many are burned out, bored, tired, or need to move on because of health reasons. If you have to sell today, then any offer will work. But our method is different.
We help our clients become “buyer ready” by implementing key strategies and programs designed to grow the revenue and profits of the business. So, when the time is right (i.e., when buyers are active), you can then use our methods to reach out to as many potential buyers as you can to eventually reach the limited auction phase and drive up value.
So if you start with one business buyer and take the first offer that comes, you will most likely NOT be getting an optimal deal.
Having said that, the truth is creating a market for a privately held company, developing a buyer list, calling for offers, and managing the limited auction takes a great deal of skill. Confidentiality is one of the critical components. Having ironclad documentation, such as an NDA (Non-Disclosure Agreement), to protect you is vital too. Locating and approaching a pool of buyers with appropriate documentation can be a challenge for a business owner too since he/she will still need to be operating the business while doing all of these things.
Since you will most likely only sell one business during your entire career, where do you learn how to create and manage a limited auction of buyers?
The best first step is to attend a Generational Equity executive exit planning conference. The investment of a few hours of your time will pay huge dividends down the road, as it will provide you with a significant amount of information about finding the optimal buyer for your business. In addition to covering the auction process, our conferences also examine:
If any of these topics above are unknown to you, or if you would like to learn more before you actively market your company, you should attend a Generational Equity conference. To learn more, call us at 972-232-1121 or email us at firstname.lastname@example.org and we will have one of our associates contact you.
No matter what you do, be sure to cast a wide net when you market your business. Don’t accept the first offer you get from a buyer!
By Carl Doerksen, Director of Corporate Development at Generational Equity.
© 2017 Generational Equity, LLC. All Rights Reserved.
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