Many business owners worry that when they try to sell they’ll be at the mercy of the market and have little control over the types of buyers they attract. That doesn’t have to be the case. Sellers can improve the quality of their applicant pool by preselecting ideal buyers.
Of course, market conditions and timing play a role in determining the quality and variety of potential buyers. But if sellers dedicate themselves to researching buyers and use networking to find compatible ones, they greatly improve their odds of getting a satisfactory deal.
LAY OF THE LAND. Sellers should research active acquirers within their own industry as well as review recently completed transactions. You might perform the research in-house, hire an outside consultant, or work with an M&A intermediary to assemble a solid list of candidates.
Search for potential buyers informally, too. For example, you or your company’s executives should attend industry conferences to get a sense of which companies are considering acquisitions. You can generally glean such information from panel discussions and conversations with other attendees. And consider asking a retired executive from your industry to serve as an informal matchmaker. Former CEOs typically have good contacts and relationships and are likely to know which companies are most likely to be compatible with yours.
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