In This Episode
After you’ve been in business for a few years, one of the strangest things starts to happen. You’ll begin to get inquiries from folks who will say they are interested in buying your company. If you’re like most small business owners, you’ll take those inquiries and store them in a file somewhere for when the time is right. So if you’ve determined the time is right, how to you make sure you find the right buyer for your business?
Defining something like the “right” or “best” buyer for your business depends on what you’re trying to accomplish. It’s a very personal and often emotional discussion. After all, it’s kind of like selling one of your kids! You’ve birthed it, nurtured and grown it, with the idea of some day being able to hand it off to someone else.
What’s most important to you? Is it getting the most money for your business? Do you want to make sure certain team members (or all team members) are taken care of? What about your customers and vendors? Do you want them to continue to experience all the fun they’ve had with you? Are you planning to stay on board after the sale of the business or will you be riding off in the sunset?
So figuring out your answer to these and other questions will eventually lead you to then asking who is the right buyer for you. There are only a couple of options when it comes to selling your business:
- Sell Internally: initially this option tends to be #1 or #2 for most small business owners. The top person they’re hoping to sell the business to is their kid(s) and/or someone who currently works in the business. This helps from a continuity standpoint as well as offers the least disruption to the business.
- Sell Externally: there are a couple of options here which is to either sell to a competitor or an individual. The competitor might look like some large multinational or a private equity roll up. Or it could be the competitor in the next town who you’ve been friendly with all these years. On the flip side, it could be someone who is looking to run their own business but they don’t have an idea for a business to start. So instead, they are embarking on a path to buy an existing business. This individual could be a corporate drop out who wants to get involved in the small business world or it could be someone who has worked in small business before.
- Leave It Up To Heirs: one that’s more popular than you think is to let your heirs figure things out after you’ve passed away. If you’re a fan of the show Succession then you got some insights into what can happen when the business owner chooses this path. Certainly makes for some entertaining television, but I’m not sure it’s what’s best for all those people left behind.
Chances are if you’re thinking about this question you’ve either come to terms with it’s time to plan your exit OR you’ve gotten an offer you think you can’t refuse. Remember to give yourself some time to go through this process and make the decision that is right for you. It’s likely this will be your one and only chance to find that right buyer.