Determining Who Will Buy Your Business
There can be many different types of buyers for any given business, however, the main options available to most small to medium enterprises (SME’s) come from the following five options:
- Family Succession
Can create a sense of achievement as your hard-won results are carried on as a family tradition, however, can be fraught with danger if the next generation is not properly equipped and trained and truly ready to be the CEO. Careful planning and a well-served apprenticeship are essential to the ultimate success of this transition. - Management Buy Out (MBO)
Occurs when existing management (or staff) buyout the current shareholder(s) or owners. They may buy all or part, they may buy personally or with external help but whatever the specifics, the MBO may secure an excellent outcome for the vendors and for new owners. - Buy a job
The most common sale type for businesses in Australia valued under $1 million, whereby the new owner is seeking a business that will pay them a fair wage as well as a modest profit. Careful and correct presentation of the business’ books to demonstrate the benefits and lifestyle enjoyed by the Vendor are essential to this type of purchaser. - Financial Buyers
Investors that plan to run the business “Under Management” and judge its success by the level of return on the funds invested and the potential capital growth. These buyers usually drive a harder bargain on the purchase price, however, they are usually cash buyers (or have ready access to investment capital) and often can settle more quickly than other buyers. - Industry Buyers
Wholesale suppliers looking to enter the retail market or opposition companies looking for synergies through market expansion. Will often pay a premium as they stand to gain larger profits over time through the addition of your business into their current structure. Again, are often cash buyers or can more readily access capital than “Buy a Job” buyers.
acquire business brokers can guide you through the differing sales processes that arise with each of these buyers and will actively pursue the appropriate type(s) of buyer that we mutually agree are the best fit for your requirements.