How to Market a Business that is For Sale
Business brokers typically throw listings up on the Web and
wait for a call, while some M&A guys discreetly contact a list of target
companies without considering a broader approach. There are few that do both. What approach is best for your business?
Most small businesses do sell via web advertising on the
business-for-sale sites such as bizbuysell.com and bizquest.com. Especially “main street” businesses that are
duplicated in every town and city in our nation. Even fairly large companies with $50 million
in sales use the web (such as mergernetwork.com) to find buyers.
However there are some companies that are so unique that
there are only a few possible buyers, and those buyers must be contacted individually. We have a client that we are about to market,
and we are not even going to list it on the web. Well, maybe mergernetwork.com, but I really
don’t expect to get any hits. We have
developed a marketing plan, and have identified and prioritized a list of
possible suitors from three different industries. From here on out it will just be plain old
hard work, with four of us contacting people in those companies, using both a
top down approach (call the president) and a bottom up approach (call the
product line manager). We’ll also
contact private equity groups, but I don’t expect much success there
either.
Although size does matter, it isn’t just size that specifies
which approach you use. I had a call
yesterday from a business owner that has five employees. It is quite obvious that there are some
synergistic companies that may see some value in acquiring him. But most business brokers will not take the
time necessary to pursue a list of companies.
To be honest, they don’t have the time since they must handle 7 to 10
listings to make a living. After all, it
does take significant time to dig around and engage with the appropriate person
in a specific company.
Sometimes using every available tool is best. We are preparing and are about to go to
market with a large sign company. This company
has done an excellent job at taking over the gas station market. When Shell or Chevron tells a gas station to “re-image’
with all new signage, this company gets a call.
There are some much larger sign companies (and some public ones) that
may love to have the expertise this company does. There are also some private
buyers that would probably love to own this company. So we’ll take both roads, we’ll advertise it
on the web sites, and we’ll also contact a list of possible suitors.
