It can be very difficult or confusing for a small business owner to understand how to sell the business in case of first time. For sellers, the main common questions are that how to identify potential buyers? Here we will discuss the essential aspects to be kept in mind while identifying a potential buyer for the business and identify the overall deal-making process.
If we talk about buyers, then there are many sellers who waste their efforts by targeting the wrong audience. It is always preferable to start the buyer-identification process by profiling the ideal buyers such as individual buyers, institutional buyers or both.
Whether you are looking for buyers within the industry or other related/complementary industries. By profiling ideal buyers it will help in reaching out to the maximum possible buyers in the shortest possible time.
Critical to Reach Target Potential Buyer
For buyer identification sellers often spend time and money in advertisements everywhere. One should focus on being discoverable in identifying the buyer and identify options which give the maximum visibility for sale proposition but make sure your confidentiality is not compromised. Dedicated technology platforms like IndiaBizForSale are excellent for making your sale proposition searchable and discoverable by potential buyers. No matter where you advertise, make sure you create an attractive business brief to catch the buyers’ attention.
Handling Buyer Inquiries and Qualifying Prospective Buyers – Do’s and Dont’s
The real process of identifying a potential buyer for your business actually begins when you start receiving inquiries (interests) from buyers. Try to ascertain how serious the buyer is – Does he respond to your communication on a timely basis? Does he ask the relevant questions about you and your business? Is he ready to sign a Non-Disclosure Agreement (NDA) before you share any critical or sensitive information with him? Does he understand the deal-making process? Classify buyers by their genuineness and credibility and share detailed information only with the buyers who are qualified according to the assessment criteria set by you.
Handling Due Diligence and Getting Your Business Valuation Right
Once you and your buyer have established trust between yourselves, it is important to understand the process of Due Diligence. The buyer will usually have a team of professionals who will investigate your business extensively. It is important that you prepare for this stage right from the day when you decide to sell your business. Make sure your books of accounts, business incorporation documents, title and ownership documents, process documents and policy documents are all in place. Having said that, Due Diligence is so much more than just documents – a seasoned buyer is likely to analyze your business’s reputation, position in the market, customer satisfaction, and technology aspects, as applicable. For valuing your business, it is always advisable to take help from an experienced, expert valuer with a credible track record. This will help in negotiating with the buyer and also give you a realistic expectation about the asking price of your business.