Last week, we discussed first steps you might take toward selling your closely-held business (read it here). This week, we discuss identifying potential buyers.
First, are you open-minded about what type of buyer you want, or do you have a clear idea already? Typically, buyers can be found:
We recommend strongly consulting with your trusted business advisors, such as your attorneys and your financial advisor (experienced in selling closely held businesses and the Transaction Advisory process), to determine which type of buyer would be best for you, your business, and your family.
If you decide on an outside buyer, there are two principal types to consider:
You and your transaction team – as discussed in our last installment, this will likely include your financial advisor, your attorney, your banker, and potentially a broker – should discuss the sort of buyer you want (strategic, financial, or no preference). Note that a broker will take a percentage of the sales price – up to 10% – as fee, which will either mean the buyer pays a higher price, or you eat the fee.
There are a number of ways to find potential buyers:
Pre-qualify any and all potential buyers financially, and, with your team, prepare a non-disclosure agreement, as any serious potential buyer will need to see information about your business which should not be made available to the general public.
Selling a closely-held business can take six months to a year, so if you are seriously considering the sale of your business in 2022, now is the time to contact us and get started.
If you would like to get the process underway, please click here to email me directly.
Until next time –