Finding “a buyer” for your business is not a problem. Our firm, for example, has a database of THOUSANDS of prospective business buyers looking for the right business to buy. Finding the “right buyer” for your unique business, however, is a much more detailed process, but well worth the quest.
Experience, the right experience, is worth its weight in gold when selecting a buyer. Does the buyer have relevant experience that will relate to your business? This prior experience does not have to be identical, but rather align with necessary qualities for running your business. Case in point: the buyer that I sold my janitorial business to was a suitcase salesman. Yes, that’s right, he sold suitcases to department stores. You may say, “How does that guy have the right experience to sell janitorial services to multifamily housing complexes?”
He actually had more relevant experience than you would think. Stop seeing suitcases as “apples” and janitorial services as “oranges” and put like experience with like experience instead. After all, this wasn’t just any suitcase salesman. He was a top salesman of a very high-priced, high-quality, kind of luggage. It just so happens that the business we were trying to sell was known for its “high-quality” image in the janitorial business. Now, instead of “apples and oranges,” suddenly you are seeing like with like.
This prospective buyer was also as experienced in dealing with executives in many department store locations so he was used to dealing with the local saleslady who couldn’t care less about what luggage to use; she just wanted to make sure that customers didn’t come storming back in to complain when the luggage was destroyed at the airport. As you can see, his past experiences in luggage sales also made him perfect for the janitorial business.
My business needed someone with sales experience. I had a manager that was awesome at running operations, but he was terrible at getting new business. As it turned out, this new buyer couldn’t just go to individual apartment complexes and sell our high-priced janitorial services, but he could meet with the management companies that managed 30 and 40 complexes to convince them to let us into all the complexes.
This was not that difficult a job for a good salesman. The hard part was convincing the local manager that we were worth the extra cost and we would take care of their needs without their new tenants coming back to complain. Suitcases or janitorial services, soap or CDs, Mazda’s or Maseratis, a good salesman isn’t good because of what he sells; he’s good because of how he sells. Turns out, this buyer was perfect!
Now that I sell businesses for a living, it amazes me how many perfect buyers we find for folks just like you every single week. Now, keep in mind, this is not a sales pitch – just an explanation of the benefits of working with a quality business brokerage firm that wants the best for both the buyer and the seller. Trust me, putting two wrongs together in a deal never makes a right.
Another case in point. I was in a manufacturing plant one day, taking a tour with the seller and a prospective buyer. As we were walking around the production floor, I pointed at an item that the business manufactured and asked the dumb question: “What is that?” The seller picked it up and began to look at it slowly and then said, “I’m not really sure.” The prospective buyer chuckled and enlightened us both, “That’s a high-pressure water valve that is used in . ..” and he proceeded to explain in detail the application for which it was used. Turns out that the prospective buyer knew even more than the seller about some details of the business operations. This prospective buyer again turned out to be a perfect fit.
How do you start the process of identifying the “like” to “like” factor in matching seller and buyer? Start with looking at your business and asking yourself, “What role do I fill in this operation?” Yes, I already know what your answer will be, “Everything!” But if you do everything and no one else can fill your shoes, then you do not have a business to sell. You would simply be irreplaceable in the worst way. You then only own your own job, not a business. Now, ask yourself again. What is the role, realistically speaking, that you fulfill in the business? Sales and marketing? Production? Logistics? Bookkeeping?
What, specifically, do you do that makes the company uniquely yours? In preparation for sale of your business it will be your job, and that of the business broker you select, to find a buyer who can do this job not just as well as you did it but actually better than you.
This is not rocket science, but rather this is something that can be done very effectively 99% of the time. And guess what? You have help from the business brokerage firm, and you have a say as to who the buyer is; none of this process happens without your active participation.
How many investments can you say that about? I mean, it’s not like as a shareholder of Coca-Cola or Google you have a say about who the new CEO is of that publicly traded company where you invested your retirement funds. Here you play an active role in planning for your retirement by screening the buyer applicants for your company. After all, the better screened the buyer, the more likely he or she will be to run your company successfully in your absence.
At the end of the day, this process is all about getting paid. Finding a qualified buyer, making sure he or she is best suited to run your company and vetting the prospect through a series of verifiable processes just makes sense to ensure your investment – now and in the future.
Of equal importance is finding a buyer who is experienced enough to run your business in your absence, regardless of what line of work they succeeded in previously. Be it suitcase sales or the restaurant business, retail or manufacturing, if you find the buyer’s experience suitable for your company, you’ve found a qualified buyer indeed.