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Five people who might buy your business

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Once you decide to sell your business, finding the right buyer will be one of your biggest challenges. 

You will come across many different types of buyer, and you may also wonder what the motivation and intentions of these potential purchasers might be.

So, let’s take a look at five prospective purchasers: who they may be, what they may want from your business, and how you might best deal with the questions they may ask. 

The investor

If you are selling a business with real potential, you may be approached by a professional who can likewise see your success and have great expectations for your business – provided you remain at the helm. 

An investor looking for a small business investment may offer to buy a certain percentage of your business, usually in cash. 

Alternatively, you may be tempted by a substantial loan at an attractive rate of interest designed to persuade you to stay on and grow the business to new levels of profitability. 

This can be a real surprise when you are determined to sell (and were expecting a sale dividend). Nevertheless, a proposal from an astute business investor should always receive very careful consideration, even if only because it gives you some unexpected new options.

The competitor

For many, a rival company can seem the most natural buyer for your business. 

They will benefit from acquiring your business and market share, but they may also be seeking your technology and business expertise as well as looking to create a larger and more cost-effective trading entity. 

One real risk of selling to a rival is that, should a deal fall through, then trade secrets exchanged during the due diligence process could damage your company’s trading interests, and possibly even compromise its future saleability.

Many owners may also find it difficult to cope with the prospect of seeing their cherished enterprise fall into ‘enemy’ hands. 

If you end up with an offer like this, it’s very important to establish the motives and future intentions of your rivals to get a clear picture of what lies behind purchase. And many would say that if such clarity is not forthcoming, it may be wise not to go forward with the sale. 

The passionate visionary

If the voice on the phone sounds driven and inspired, you may imagine your former self has arrived to take the business forward into the future! 

The most common type of enquiry you will get for your business for sale are aspiring or rising entrepreneurs – these buyers intend to take an interest your business as it either suits their own lifestyle or they see potential in the business. 

This doesn’t mean that you will be flooded with interest for your business however, many have not done the thorough research into what they are looking for in a business and can end up being no more than a tyre kicker. 

So, be sure that their intentions are serious and coherent, and always make certain they have the right level of financial backing to be able to go forward with the purchase.

The committed employee

This is another natural purchaser for your business and may give you and your staff the added reassurance the business will continue to flourish in good hands.

However, this must be balanced against the risk of raising alarms at the first mention of a business sale, as staff can start to fear for their own job security. As a result, you might lose some of your most trusted and valuable employees.

This approach should be made very delicately and with employees whom you trust and see a true possibility in them being interested in taking over the business.

The family member

There is the potential here for a comparatively seamless regime change. Nevertheless, there can sometimes be an implication that sales between family members qualify for some kind of family-discount. 

When you need to realise a certain sum from a business sale, it is important to agree at the outset that you will need to conduct the sale in a conventional business fashion. 

Many families do precisely this to ensure the sale process is seen as fair and transparent by all. 

As a seller, it is also sensible to look a little beyond the motivations of others to clarify and determine your own sale expectations and priorities. Then, when any of these prospective purchasers come calling, you will be much better placed to consider what they each have to offer.
By Jo Thornley, Head of Brand and Partnerships at Dynamis. Joining in 2005 to co-ordinate PR and communications and produce editorial across all business brands. She earned her spurs managing the communications strategy and now creates and develops partnerships between, and and likeminded companies.