Who might buy.
WHO BUYS SMALL BUSINESSES
Competitors Suppliers or customers, integrating Individuals seeking to own a business Employees and management Family members Larger companies entering a market
WHY COMPETITORS FREQUENTLY PAY MOST
They can combine operations and remove duplicated cost.
WHAT THEY RISK
Learning your business and then not buying.
WHAT TO DO ABOUT THAT
Disclose in stages, under confidentiality.
WHAT TO DISCLOSE INITIALLY
Enough to establish interest, without identifying customers or sensitive detail.
WHAT TO REQUIRE BEFORE MORE
A signed confidentiality agreement.
WHAT TO UNDERSTAND
That it provides a remedy, not prevention.
WHAT THAT MEANS
Disclose only what is necessary at each stage.
HOW TO APPROACH THE MARKET
Directly, to identified parties Through a broker or adviser Through professional networks
WHAT A BROKER PROVIDES
Access to buyers, and a buffer in negotiation.
WHAT THEY COST
A fee, usually a percentage.
WHAT TO ESTABLISH
Their fee, what triggers it, and whether exclusivity applies.
WHAT TO PREPARE
An information summary: what the business does, its performance, why it is attractive.
WHAT NOT TO INCLUDE INITIALLY
Customer names, detailed financials, staff details.
WHAT TO ESTABLISH ABOUT ANY INTERESTED PARTY
That they can actually fund a purchase.
WHY EARLY
Serious time is wasted on parties who cannot pay.
WHAT TO ASK FOR
Evidence of funding.
