The Trick to Selling Your Business? Think Like a Buyer

Dallas businesses hoping for successful mergers and acquisitions need to work with quality investment banking firms that know their niche. No matter your sale goals or whom you hire as your M&A firm, though, one constant remains true across sectors and in every sale: you need to think like a buyer. It’s time to break out of your comfort zone, look at your business with discerning eyes, and consider how to make it more enticing to a typical buyer. Here are five ways to do that.

‍

Understand Your Story

‍What’s the story of your business? Note that this should be the story of your company, not you as the owner. Leave out the hard work you’ve put in, the emotional connection and struggles, and what’s left? How has your company thrived and adapted to adversity? What did it do to survive the pandemic? A compelling story generates interest and shows buyers that your company will be around for the long-term. Without a story, selling will be an uphill battle.

‍

Minimize Risk

‍Owning a business is risky. Buyers understand this. This is why they seek to minimize risk to the greatest possible extent. A business with recurring income, in a thriving niche, with reliable forecasts, and a strong performance history is a low-risk proposition. Anything else may turn buyers off. Work on making your business as low-risk as possible, and be sure to prominently feature its many attributes in any marketing materials you develop.

‍

Get All the Paperwork in Order

‍Ultimately, what you tell buyers matters a lot less than what you’re able to demonstrate. Buyers will check every claim you make and conduct a thorough due diligence process. This will go a lot more smoothly if you promptly respond to due diligence requests, and if your paperwork supports your claims about your company. Get this documentation in order before you put your company on the market, so you can enjoy a smooth sale process that moves quickly.

‍

Prepare for Negotiations

‍Deal negotiations require a great deal of effort and insight. The right team can help you determine a reasonable sale price, as well as how various sale terms might affect the ultimate value of the deal. Working with an M&A firm is critical for effective negotiations that don’t distract you from the daily demands of running your company.

‍

Know Your Ideal Buyer

‍You might not have a specific individual buyer in mind, but you should have a keen understanding of what type of buyer would be a good fit for your company. Do you hope to sell to PE and see your company grow into something new and bigger? Would a competitor love to gain access to your products and customers? Is your business a great platform or add-on? Identifying your ideal buyer can help you effectively market to that buyer and assess whether the buyers who contact you are serious contenders or merely window shopping.