You’ve worked hard to build your business into a successful enterprise. Now you want to sell it and reap the rewards of all those years of hard work. There are many questions involved with selling a business, however the most important is: How do you locate qualified potential buyers?
Some people say the quantity of buyers who are considering acquiring your business is most significant. Others say the quality of prospective buyers is more important, regardless of number. But the right response is that both are very important. Here’s why:
If you have 50 prospective buyers interested in your business, then you have plenty of quantity. But if you are offering a $1,000,000 manufacturing business and these buyers can only afford a business that costs less than $300,000, or if they all desire a service business, then this “quantity” of potential buyers is a waste of time. You will waste hours speaking to unqualified prospects about the opportunity when they have no interest in actually purchasing it.
Conversely, say you only have two prospective buyers thinking about your business and they are looking to spend at least $1,000,000 on a manufacturing business. You may have excellent buyer “quality” but not sufficient quantity. On average, you need at least 10 or more qualified prospective buyers to consider your business before you can reasonably expect to sell it. And the more qualified potential buyers you have considering your business, the higher the sales price typically is.
In a nutshell, the more qualified buyers you have looking at your business, the faster you will sell your business and the more money you will make on the sale. But how do you get both quantity and quality of buyers interested in your business? The key is to employ several methods of advertising that don’t cost you a fortune.
Word of Mouth Advertising
This method of advertising is very spotty and shouldn't be considered a core form of advertising. Because of its nature, your business is exposed to an extremely minimal quantity of potential buyers that most likely aren’t qualified. As a consequence, this approach of advertising provides neither quantity nor quality, which can make it very ineffective at helping you sell your business.
Classified Ads in the Local Paper
The old-fashioned method of promoting a business for sale was to put a classified ad in one or more newspapers and hope plenty of qualified potential buyers would stumble upon it. This approach is not very successful because you only have a few quick lines of text to tell your complete story and gain interest in your business. This not only reduces the overall quantity of prospective buyers, but you also end up wasting time on a lot of unqualified buyers. As a result, classifieds are usually not very good at producing a high quality or quantity of buyers.
On the Web
Today, one of the most successful method of attracting both the highest quantity and quality of potential buyers interested in your business is by marketing on an online marketplace. These marketplaces are searched by hundreds of thousands of buyers each month, and can generate a staggering amount of interest in your business.
You'll find many online marketplaces to choose from, but they are far from equal. Some have inadequate search capabilities, which mean your quality of prospects will decrease. The better the search functions the site offers, the more precisely buyers can browse for what they want. And when a buyer finds your business, they are usually highly qualified.
Some online marketplaces are just interested in amassing listing fees from you, regardless of whether or not they help you find a buyer. These sites charge a regular monthly listing fee that is not tied to overall performance of any kind. As a result, they may or may not deliver you any qualified buyers, and they really don’t have any incentive to do so.
The most useful business-for-sale marketplaces put their money where their mouth is and only charge sellers on a pay-for-performance basis. With these sites, you post your business for sale on the site and it appears in buyers’ search results when they search for a business that meets their criteria. But you are only charged a small fee if the buyer actually clicks on your posting and views its information. And it is possible to set your own listing price to manage the quantity of potential buyers you want.
Performance-based marketplaces are incredibly efficient and highly effective because you get exposure to the maximum amount of highest quality buyers, but you don’t pay if you don’t have any qualified buyers view your listing.
Business brokers are typically very professional and experienced in the art of buying and selling a business. Plus they are skilled at supporting sellers through the entire sales process. They can prepare your business for sale and facilitate all discussions with prospective buyers on your behalf.
On top of that, brokers will help build interest in your business from buyers through their connections with other brokers, as well as listing your business for sale on their site.
To get the maximum quality and quantity of buyers interested in your business it is ideal to complement a broker’s services with additional promotion initiatives. You could try this either in conjunction with the broker’s efforts, or on your own.
Tags: finding buyers, business brokers, business brokerage, selling a business