The things that seem important to buyers are not always what we think they should be concerned with–and price is not always the most important factor. Today’s business buyers are risk-averse and want to know the financial stability of a company before investing. They also want assurances that they’re getting the best deal possible.
You may be asking yourself, “What can I do to make my business more attractive to buyers?” The answer is, unfortunately, there is no one-size-fits-all answer. Every business is different, and will require a unique approach to pique the interest of a potential buyer. However, by understanding what buyers are looking for, you can put your business in the best position possible to sell. So what do business buyers want? Let’s take a closer look.
The buyer is often hesitant to make a purchase. They wait until the last minute to back out of a deal. So what makes a buyer decide to buy? Contrary to popular belief, money is not the primary motivator. Most buyers buy a company for other reasons, such as the potential to make a life-changing impact or the opportunity to do something they’re passionate about.
According to recent surveys, about half of the people in the county are unhappy with their jobs. So it’s no surprise that many buyers are interested in purchasing businesses as a way to change their lifestyle. A recent newspaper article quoted a very successful business woman, who left her job and bought a bookstore because she was “looking for a change, a way to be more rooted and be at home more.”
The make-up of a typical buyer
The typical small business buyer usually has many of the following traits:
- 90 percent are first-time buyers. In other words, they have never been in business before.
- Almost all of them are looking to replace a job. Business brokers primarily sell income substitution.
- Most buyers will have about $50,000 to $100,000 in liquid funds to use as a down payment.
- Majority of the buyers are looking at businesses priced at about $100,000 to $250,000.
- Most buyers will not have sufficient funds to pay cash for a business.
Generally, buyers who looks into purchasing a business will have many of the characteristics described above. They have motivation and have the financial resources to buy a business. In addition, they’ll be knowledgeable about the industry and be able to see the potential in your business. However, there are also some specific attributes that serious buyers usually have. They’ll be decisive and able to make quick decisions, and they’ll have a good network of business contacts. Finally, they’ll be ready and willing to take on the responsibility of owning a business. By understanding who your typical buyer is, you can better target your marketing efforts and make the sale process smoother.
Who is a serious buyer?
- Has the necessary funds and they are readily available
- Can make their own decisions
- Is flexible in the type and location of a business he or she will consider
- Has a realistic and sincere need to buy
- Has a reasonably urgent (within three to four months) need to buy a business
- Is cooperative and willing to listen
If the prospect doesn’t have many of the above traits, it might be time to move on. Serious buyers are typically more invested in the process and are likely to be more successful business owners. If you’re a buyer, it’s important to make sure you have these traits. If you don’t, you may not be as serious as you think, and it’s worth taking the time to reassess your reasons for wanting to own a business. With these things in mind, you can be sure to find the right buyer for your business.