How to Market Your Business for Sale
Welcome to the fifth instalment of our exit strategies series! You’ve put in the effort to get your business ready for sale, and now it’s time to take the next step: reaching out to find the right buyer. This is a critical phase in your exit strategy, and knowing how to approach it will make all the difference in securing the best outcome.
Working with a Broker or Agent
You will work with a broker or agent to build a list of potential buyers, so it’s important to seek advice on who to appoint as your broker. When selling your business, you have a range of options: business brokers, online marketplaces or going direct through your own network.
Costs and Fees
Charges will apply when appointing a broker or listing on an online marketplace, and they typically take a percentage of the sales proceeds. Be sure to read the contracts carefully to understand what level of support you will and won’t receive for your money. Fees can be substantial, so it’s worth asking the difficult questions and getting a few quotes.
Building the Buyer List
Think creatively about the list – are any of your competitors acquisitive? Are any of your suppliers or customers looking to make vertical acquisitions? Are there private equity firms operating in your sector, or high-net-worth individuals seeking investments? Your broker will prepare a list, but expect to be consulted, as you know your market best.
Sales Document and Confidentiality Agreement
Your broker or agent will prepare a sales document to market the business. Depending on the method of marketing, this document can be quite brief or more detailed. Once you have interest from potential buyers, you’ll want to ask them to sign a confidentiality (or non-disclosure) agreement to protect the business.A buyer will typically request information to understand the business in more depth, and this information could be commercially sensitive. Consider how much you’re willing to release at an early stage and who you’re sharing it with. If you’re unsure, take advice.
Key Takeaways
The key to successfully marketing your business for sale is working with the right broker or agent and understanding the costs involved. Be sure to consider different options for reaching potential buyers, such as brokers, online marketplaces or your own network. It’s also essential to protect your business by having potential buyers sign a confidentiality agreement and carefully manage the release of sensitive information.
Get in touch
For more information or guidance on how to navigate your exit strategy, contact Cathy Revis, Head of Deal Advisory, on 02380 332 733 or email cathyrevis@fiandertovell.co.uk
