There are many reasons why buyers buy businesses. Some of the most common reasons include:
- Laid-off, fired, or about to be transferred
- Desire for more control over their lives
- Desire to do their own thing
- Job dissatisfaction
It is important for business owners seeking to sell their business to know who the buyer is and what motivates them. If the buyer is not serious, the sale will never close.
A Buyer Profile
Who is the typical buyer looking to purchase a business? The average individual is likely to be a male, although this is changing rapidly. He will have less than $100,000 to invest in the purchase of a business. The funds may come from personal savings or financial assistance from family members. This is the first time he has ever owned a business. In other words, he is likely to buy a business he had never considered before being introduced to it.
When it comes to business ownership, there are a few different types of buyers. For instance, some people buy businesses in order to get out of their current situation, whether they’re unemployed or just disagree with their current job. Moreover, others want to be in charge of their own destiny and don’t want to work for anyone else.
Above all, money is important to these people, but it’s not always the top priority. In order to pursue their dream of owning their own business, they must be able to make the leap of faith necessary to take the risk. This means that they need to be confident in their ability to succeed. So if you’re a business owner looking to sell, it’s important to know who your target buyer is and what motivates them.
Buyers who want to go into business strictly for the money usually are not realistic buyers for small businesses. Keep in mind the following traits of a willing buyer:
- The desire to buy a business
- The need and urgency to buy a business
- The financial resources
- The ability to make his or her own decisions
- Reasonable expectations of what business ownership can do for him or her
What Do Buyers Want to Know?
Buyers will want to know about your financial history, your customer base, and the future of your industry. They’ll also want to know about your company culture and how you plan to transition out of the business. If you can provide clear and concise answers to these questions, you’ll make the sale much easier for both yourself and the buyer.
- How much money is required to buy the business?
- What is the annual increase in sales?
- How much is the inventory?
- What is the debt?
- What is the profit picture in bad times as well as good?
- Will the seller train and stay on for awhile?
- What makes the business different/special/unique?
- What further defines the product or service? Bid work? Repeat business?
- What can are the ways to grow the business?
- What can the buyer do to add value?