If you ever wondered if it’s possible to sell to a business competitor, the answer is yes – it’s quite possible. However, selling to a competitor is not the same as selling to a buyer who is new to your industry. There are various factors you’ll need to take into account when making such a sale.
A Competitor Can Be a Great Buyer
Competitors usually have an excellent understanding of how your business works. This can make the negotiation process go more smoothly. They may also want to buy your business because they already know the value it could bring to their company. It’s definitely worth taking a meeting with a potential competitor to explore the possibility.
Always Proceed with Caution
Many cases have shown that competitors will act as though they want to buy in order to acquire access to inside information. Always keep sensitive information like client lists and other secrets to yourself until the sale is complete.
Negotiate from a Place of Knowledge
A business broker can help you understand how much your business is worth. They can negotiate with potential buyers, including business competitors. Knowing what your business is worth gives you the leverage you need in order to get the best deal for yourself and your employees.
Be Prepared to Accept Certain Legal Conditions
Your competitor may ask you to sign a non-compete or for you to stay on as a consultant after the acquisition. This is a prudent step and one that makes tremendous sense. You would want to make sure that the competitor didn’t simply “set up shop” somewhere else a few months or even a couple of years later. Likewise, tapping your expertise is another prudent move for your former competitor.