Find Someone to Buy Your Business! Who Wants to Buy Your Business?

Find Someone to Buy Your Business! Who Wants to Buy Your Business?

Who are the Buyers?

  1. Employees
  2. Strategic same or related industry acquirers
  3. High net worth individuals
  4. Private equity firms

What Buyers Want:

  1. Profitable business
  2. Experienced, loyal, and motivated employees
  3. Diverse customer base
  4. Sustainable growth potential
  5. Strategically well structured business – asset / compensation / tax planning

The Buyers

1.  Employees

  • ESOP – Employee Stock Option Plan

- Ideal for companies with:

  • $1 Million or more in earning
  • $1 Million or more in employee payroll

-         $75,000 to $100,000  cost to set up ESOP

2.  Strategic Acquirer

  • Complimentary Company – highest value, lowest risk
  • Non-local Competitor – good value, moderate risk
  • Local Competitor – low value, highest risk

3.  High Net Worth Individual

  • Most common buyer

- Former corporate executive

- Second career baby boomer

- Experienced and financially qualified

- Highly motivated

4.  Private Equity Firms

  • Typical Investment Criteria:

- $10 Million + in sales revenue

- $1 Million + in earnings

- Differentiated product or service

- Proprietary market position

- Strong layer of management

Please Note:  The Business Wealth Preservation Group is not a business broker.  The foregoing information is to provide you with information, knowledge, and an understanding of the obstacles, issues, and opportunities for selling your business.  We can recommend a broker from our list of preferred providers.  Please call us with questions.

The Challenge of Selling a Business – Why Businesses Don’t Sell

The Challenge of Selling a Business – Why Businesses Don’t Sell

The Three Paths to Exit

  1. Close / Liquidate the Business
  2. Sell to a 3rd Party
  3. Pass the Business to a Family Member – Only 17% of Business are passed to the next generation

The Baby Boomer “Tidal Wave”

  • 7 out of 10 businesses will be for sale in the next 10 years
  • Largest transfer of privately owned businesses in U.S. History
  • Inc Magazine – “An estimated 65 -75% of small businesses will go up for sale in the next 5 to 10 years! Why? Retiring Baby Boomers.

Most Businesses Never Sell – What are the odds of selling?

Annual Revenues $ Success Rate

Below 750,000                                          1 out of 5.5                  18%

750,000  – 2,000,000                           1 out of 4                      25%

2,000,000  -  6,000,000                      1 out of 3.5                  35%

50,000,000 +                                           1 out of 1                     100%

  • Inc. Magazine – “Historically only one-quarter to one-third of all private companies ever manage to find a buyer.”

Why the high failure rate?

  1. Business is priced incorrectly
  2. Business is not properly prepared for sale
  3. Insufficient market exposure

Key Factors to Successfully Sell a Business

  • Provide the buyer with a fair market salary
  • Fund capital expenditures required to maintain historic revenues
  • Provide a reasonable return on investment
  • Service acquisition debt in 3 -5 years

Please Note:  The Business Wealth Preservation Group is not a business broker.  The foregoing information is to provide you with information, knowledge, and an understanding of the obstacles, issues, and opportunities for selling your business.  We can recommend a broker from our list of preferred providers.  Please call us with questions.


Copyright 2010 The Business Wealth Preservation Group, LLC.