Nashville is a huge draw to people looking to buy a business. But not all buyers are the same, and sellers should be prepared to meet an eclectic mix of individuals and corporations looking to take over their operation. Here, we take a look at the six types of business buyers you might encounter if you are getting ready to sell your business.
1. The Synergistic Buyer
The synergistic buyer is often one of the most enthusiastic. This is an individual or entity that owns a business that already complements yours. Their belief is that, by acquiring your business, they can make both businesses successful while benefiting their customer base. Someone looking to buy a business as a complement to their own will have experience in your general industry and will likely have a proven track record of success. They may see something in your business that theirs desperately needs to move to the next level. One example would be a roofing company owner acquiring a window installation business. In this example, the customer base likely overlaps, and bringing these two services together may be a lucrative move.
2. The Financial Buyer
A financial buyer is looking to buy a business for one reason: Profit. There are many financial buyers searching through the Nashville market, but they may present the most challenges for a seller. Someone who wants to buy a business for profit only is not looking for a job or a way to serve their community. They are interested in cold, hard facts, and only want to know whether or not your business generates an impressive profit.
3. The Competitor
During your time in business, you have likely had many rivals that offer the same types of products and services as you. Chances are, these may be some of the first people in line when it is time to sell. Competitors often buy a business in their industry as a way to capitalize on a larger portion of the market. These are excellent buyers to consider because they already know the ins and outs of your market as well as the local area. Something to keep in mind, however, when discussing your business with a competor is that you will need a strong confidentiality agreement in place.
4. The Foreign Buyer
US money is not the only money out there, and foreign buyers often have ample amounts of cash. They are ready to buy a business in Nashville and other growing cities as a way to get their foot in the proverbial door of the US. Although these are absolutely viable purchasers, there may be difficulties. For one, a foreign buyer may have to face complicated licensing issues. And if English is not their primary language, there may be communication barriers that can make it difficult to swap information.
5. The Individual
Individual buyers are often established in their careers. They want to buy a business to supplement their retirement or to leave a legacy for their family. One of the biggest benefits of entertaining an individual buyer is that you only have one person with which to negotiate. This can make the process go along much more smoothly. Another benefit of an individual buyer is that, in most cases, they are willing to put their heart and soul into the business. If you have an emotional connection with the company you have built, an individual buyer is a good option as they will treat your business with respect when it becomes their own.
6. The Family Member
Lastly, you may consider selling your business to a family member, such as a sibling or adult child. There are significant benefits as well as looming challenges to consider. On one hand, a family member that wants to buy a business from you has likely been involved with its operation for many years. Selling this way can ensure a virtually seamless transition. On the other hand, there may be hurt feelings if they do not have enough money to make the purchase, and you have to sell to someone else.
There are many people that want to buy a business in Nashville. Whether you plan to sell to a family member, a foreign entity, or a soon-to-be retiree, it pays to know who is out there looking. For more information on how to sell or buy a business, contact Beacon Exit Advisors.