There are some significant differences in how companies prepare themselves, who they hire (e.g a business broker? M&A Advisor? investment banker?) and the selling process for different size businesses. Here is a good overview of the differences.
Selling a small business is like selling a nice but standard automobile, like a 2006 Ford Explorer. You don’t really need to describe much about it because most people know what a Ford Explorer is, so typically you’ll have a one page summary about the business (I’ve always thought there should be more because, hey, a business isn’t really like a car, but typically you just don’t get it). It doesn’t make sense to market the Explorer nationally, so you would probably use Craigslist, some local publications and maybe ebay. For businesses, its bizbuysell.com, bizquest.com, businessesforsale.com, etc. Typically a business broker puts their listings up on the web, and that is all the marketing effort that gets done – and really that is typically all it takes since small business buyers know to search there.
Middle Market Companies
Mid-size companies that make up the “middle market” are more like a rare, antique automobile, say a 1948 Ferrari Barchetta, whatever that is (I just looked it up on the web). Now you’ll want a fairly complete package of documents and some nice photos. A buyer is going to want to know the condition, the history, and “hey, it looks great, but does it run”? Similarly, a middle market company needs a complete “book” that describes all aspects of the company. In our case, we also produce a video for our clients so buyers get a sense of the management, facilities and customers.
You’ll probably skip Craigslist and the local publications in selling the Ferrari because that isn’t going to work. You may as well try ebay, but most likely the buyer isn’t going to come from there. The best way to sell the car is to hire a broker, and a good broker is going to start a campaign to find potential buyers. They’ll address automobile clubs, trade magazines, and car shows. They would send letters to known enthusiasts, because they know the best buyers don’t necessarily have an account on ebay. They know the market isn’t just the
Large companies are like a cargo ship. There are not that many buyers that would be interested, so you would hire a specialized broker that knows the industry and can approach the buyers he has in his database. A large marketing campaign is not needed. For large businesses, typically an investment banker is hired that has industry specific knowledge that can be used to find buyers and structure an appropriate deal.