HBSI Will Assist in Finding Willing and Able Buyers for Your Business
Who Is The Buyer?
Buyers buy a business for many of the same reasons that sellers sell businesses. It is important that the buyer be as serious as the seller when it comes time to purchase a business. If the buyer is not serious, the sale will never close. Here are just a few of the reasons why a buyer might be interested in buying a business:
- Laid-off, fired, being transferred (or about to be any of them)
Early retirement
Job dissatisfaction
Desire for more control over his or her life
Desire to do his or her "own thing"
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A Buyer Profile
Here is a look at the make-up of the average individual buyer looking to replace a lost job or wanting to get out of an uncomfortable job situation. The chances are he is a male (however, more and more women are going into business for themselves so this is rapidly changing). Almost 50 percent will have less than $100,000 in which to invest in the purchase of a business. In many cases the funds, or part of them, will come from personal savings followed by financial assistance from family members. The buyer will never have owned a business before, and most likely will buy a business he or she had never considered until being introduced to it.
Their primary reason for going into business is to get out of her or his present situation, be it unemployment, job disagreement (or discouragement). The prospective buyer wants to do their own thing, be in charge of their own destiny and they don't want to work for anyone. Money is important but it's not at the top of the list, in fact, it probably is in fourth or fifth place in the overall list. In order to pursue the dream of owning one's own business, the buyer must be able to make that "leap of faith" necessary to take the risk of purchasing and operating their own business.
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
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What Do Buyers Want to Know?
This may be a bit premature since you may not have decided to sell, but it may help in your decision making process to understand not only who the buyer is, but also what he or she will want to know in order to buy your business. Here are some questions that you might be asked - and, should be prepared to answer:
- 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?
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 be done to grow the business?
What can the buyer do to add value?
What is the profit picture in bad times as well as good?
For a more detailed discussion of types of buyers, go to Valuation
Copyright 2002 BBP
Return to Selling A Business
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Business Brokerage based
on fairness, equity
and a 'win-win' mentality.
Serving Southern California
with a nation-wide network.
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We focus on providing complete business transfer services. We assist in the buying and selling process, and provide third party valuation services for all types of businesses.
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| 7668 El Camino Real, Suite 104-614
Carlsbad, CA 92009
Ph: 858 735 9600, Fax: 760 944 8146
Info@HollandBSI.com
Each office is independently owned and operated
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