The main question in selling a ready-made business is who is ready to buy it and who is interested in it.
On whom to sell the business will depend on how to interact with buyers, where they “live” and how to build a dialogue with them.
We should not forget that the reasons for buying a business are very different from the motives for selling it.
Here are some of them:
- Buying a sales chain;
- Investing in a stable business with predictable results;
- Acquiring a stake to control operations;
- Serial deals for startups;
- Interest in customer base;
- Taking on debt to at least get something back and resell later on.
The portrait of the buyer and his search depends significantly on the scale of the company and the scope of its activities. It is possible to consider the question of customer search from another angle, from the perspective of those who are potentially interested in it. So, let’s try to identify several categories of buyers and their motives.
Competitors are the people with whom it is worth interacting when selling the company in the first place. Some businessmen see their competitors only as their rivals or even enemies. They don’t want to engage in a dialogue with them, they don’t want to interact with them in any way.
In my opinion, you should do things differently, because you have a lot in common with them. You have a common way of earning a living, there is an understanding of the industry in which you operate, it is clear how the business processes are built and what the profits can be.
– The first thing that may attract competitors is the favorable location of your store. In this case, buying is the only way to get exactly the location you like.
– The second thing of interest is the customer base, which is hard to pull in other ways, such as price cuts, promotions, etc.
– Third – the purchase of a business with employees already trained, who are used to working in this area, know its specifics and characteristics. They are satisfied with the working conditions, they were selected for, they do not need to train, sift out, to spend time and resources.
– Fourth – buying your business will reduce competition in the market and to some extent to raise prices, which will bring additional profits.
– Fifth – the possibility of rapid growth. This is especially true for other regions and cities. Expand the network by buying a faster way than sending a team of “discoverers” who will look in an unknown place for new employees and unclear locations.
2. Business Partners
If you already have partners in your current business, the subject of communication would seem obvious, but the results of negotiations and additional terms have many variations. It’s worth paying attention to whether they have the first right of redemption, whether they can block the deal and limit your exit from the business. If so, the above options will require negotiation.
But they may very well have wanted to increase their stake in the overall business themselves for a long time and your offer will be tempting to them. Some of them will be interested in investments, others will be inspired by the desire to increase their influence. If the relationship is far from ideal, the incentive may be to get rid of your presence.
Very often employees are active, ambitious, want to grow, develop and become co-owners of your business or completely buy it out.
The advantage of selling a business to team members is that they know the structure of the company, the potential for development, understand the tax forms and have the skills reading a w2 like a pro.
They have a clear understanding of the work and if it suits them and motivates them, then having become the owner of the business their desire to develop will grow manifold. An additional plus is a fact that they have already formed a team relationship with their future employees.
The main obstacle to transactions with employees is their lack of financial resources to buy. Personal savings and a pledge of one’s property probably won’t be enough.
Franchising is one of the successful business models, but when selling, some complications are possible. They may be associated with restrictions in the contract with the franchisee.
The first thing to do is to see the terms of the contract on whether you have the right to sell the business on your own, or whether you need to get his approval. As a rule, such restrictions should not arise, but if they are, you need to build a dialogue with the franchisee.
Often the franchisor itself is willing to help with the sale of your business if you have lost the desire to develop it. It may be of interest to him to activate with the help of new active participants.
I am convinced that you should not sell the business to anyone who wants to. It is necessary to check the reputation of the buyer and assess his integrity. do not give the company or its share of people who do not inspire confidence in advance. It is possible to sell in such a way that you still owe money.