I find it fascinating that the processes to sell small, medium and large business are so different. So when I say in title of this post that marketing is critical – I really mean appropriate marketing. Here are the differences in how businesses are marketed by company size:
Small Company (Less than $1 million in sales)
Most small companies are sold and marketed by business brokers. They handle a lot of businesses at once, and don’t have the time do much more than put the listing up on the web and wait for a call. But even at that there are some useful marketing techniques. Enhanced photo ads on the business for sale websites work to pull in more buyers. You would kind of expect that those looking at businesses would look behind the slick photos, but the photo ads get seen by more eyeballs and it works. In addition, your broker can pay these web sites to email out to their active buyer list, and this also enhances the leads.
Middle Market Company ($1 to $50 million in sales)
This is the size where private equity groups (professional investors) and strategic buyers come into play. Strategic buyers are companies that are not necessarily looking to purchase, but would be thrilled to be able to acquire a complementary company if given the right opportunity. It is reaching these parties that can be difficult since there can be a surprisingly large number of possible buyers you want to reach out to – both here as well as in Europe and
Large Companies (Over $50 million in sales)
This is the area of investment banks, many of whom will specialize in a specific industry. There is typically a much small universe of potential buyers for these size companies, so a marketing campaign like in the middle market doesn’t make as much sense. Industry contacts and the ability to make a few key phone calls is important.