One of the biggest values we add to any transaction is helping to coach sellers on the various buyers that may line up to buy their business.
We want to negotiate leverage and make buyers compete for a sale. We can only do that if we convince our sellers to be patient and to not only go down one road too quickly.
Patience and prioritization are key to a successful exit.
When prioritizing buyers, strategic buyers are definitely at the top of the list. This is in part because they can often offer higher valuations, but also because they may already possess a great deal of knowledge about your business and have great motivation.
These can often be (but aren’t always) competitors, suppliers, or customers who have known you and your team a long time, and as such, don’t need a “getting to know you” period.
What they may need instead is an intensive due diligence process. This is because they may be looking to acquire your company as a turnkey expansion into a market and leverage back-office economies of scale.
They will want to examine synergies and business processes in depth to make sure joining forces won’t be overly difficult or challenging. Strategic buyers may also be private equity firms who think they can manage your company better than you and plump it up for an even larger acquisition down the road.
Don’t take it personally! Just smile and take the money.
However, many of our transactions don’t involve strategic buyers at all but are entirely composed of financial buyers. Their priorities are getting a reasonable return on investment, good growth opportunities, competitive advantages, a growing market, and strong fundamentals – be it great management or reliable staff.
They’re willing to wait for their return, but not forever. They will also often have to line up financing, unlike strategic acquirers, which can lengthen the time of a transaction.
When we as brokers prioritize buyers to our seller, we do so taking a number of factors into account, including our own sense of the various situations and actors.
We’re looking not just to close a sale, but to make sure there’s a good match between buyer and seller so that the transaction closes well for everyone.
We believe in win/win…always.
One of the advantages of hiring an APEX broker is knowing that we won’t introduce you to a buyer who isn’t financially qualified, or a seller who doesn’t have his/her paperwork in order. Give us a call today, whether you’re a serious buyer looking to buy or a motivated seller who is serious about selling.