Article Contributed by Satish Patel

Entrepreneurs are largely driven by the idea of being one’s own boss and are passionate to create wealth rather than money. To start out on one’s own is challenging and most of them would love it, but it can turn out to be a bumpy ride and face an abrupt end. The current downturn has left many such examples where the best of ideas backed by highly skilled entrepreneurs and a concrete business plan too face questions on survival.

As an entrepreneur, you may have kicked-off with a small to mid-sized set-up and that might have not turned out to something that you have wished for. Funds would have become a constraint to grow further, capital market crisis would have lead to little financial access and there seems lesser possibility of help from friends or families. How would you tackle this?

One might agree that continuing with the dream venture till you are forcefully pushed is not a good idea. You might be forced to sell at throwaway prices. In the need of hour, you should instead plan for an exit strategy that can help you realize a deserving value for your business before you’re backed against the wall.

Once the decision to sell has been made, the business owner should be aware of the variety of possible business buyers. Just as small business itself has become more sophisticated, the people interested in buying them are becoming more divergent and complex. With a little bit of preparation, the value of any business can be multiplied several times and, in some cases, many times.

The following are some of today's most active categories of business buyers.

Business Competitors

This is a category often overlooked as a source of prospective purchasers. The obvious concern is that competitors will take advantage of the knowledge that the business is for sale by attempting to lure away customers or clients.

However, if the business is compatible, a competitor may be willing to "pay the price" to acquire a ready-made means to expand. A business brokerage professional can be of tremendous assistance in dealing with the competitor. They will use confidentiality agreements and will reveal the name of the business only after contacting the seller and qualifying the competitor.

The Foreign Buyer

Many foreigners arrive in the United States with ample funds and a great desire to share in the American Dream. Many also have difficulty obtaining jobs in their previous professions, because of language barriers, licensing, and specific experience. As owners of their own businesses, at least some of these problems can be short-circuited.

These buyers work hard and long and usually are very successful small business owners. However, their business acumen does not necessarily coincide with that of the seller (as would be the case with any inexperienced owner). Again, a business broker professional knows best how to approach these potential problems.

Important to note is that many small business owners think that foreign companies and independent buyers are willing to pay top dollar for the business. In fact, foreign companies are usually interested only in businesses or companies with sales in the millions.

Synergistic Buyers

These are buyers who feel that a particular business would compliment theirs and that combining the two would result in lower costs, new customers, and other advantages. Synergistic buyers are more likely to pay more than other types of buyers, because they can see thhttp://getentrepreneurial.com/mt-static/images/formatting-icons/bold.gife results of the purchase.

Again, as with the foreign buyer, synergistic buyers seldom look at the small business, but they may find many mid-sized companies that meet their requirements.

This category of buyer comes with perhaps the longest list of criteria--and demands. These buyers want maximum leverage, but they also are the right category for the seller who wants to continue to manage his company after it is sold. Most financial buyers offer a lower purchase price than other types, but they do often make provision for what is important to the seller other than the money--such as selection of key employees, location, and other issues.

For a business to be of interest to a financial buyer, the profits must be sufficient not only to support existing management, but also to provide a return to the owner.

Individual Buyer

When it comes time to sell, most owners of the small to mid-sized business gravitate toward this buyer. Many of these buyers are mature (aged 40 to 60) and have been well-seasoned in the corporate marketplace.

Owning a business is a dream, and one many of them can well afford. The key to approaching this kind of buyer is to find out what it is they are really looking for.

The buyer who needs to replace a job can be an excellent prospect. Although owning a business is more than a job, and the risks involved can frighten this kind of buyer, they do have the "hunger"--and the need. A further advantage is that this category of buyer comes with fewer "strings" and complications than many of the other types.

A Final Note

Sorting out the "right" buyer is best left to the professionals who have the experience necessary to decide who the best prospects are. Ask for help of experienced business brokers who can devise a sound strategy that gets your business the right buyer and a deserving price.

About Author:
Satish Patel is the founder CEO and President of Sunbelt Business Sales and Acquisitions, New England (www.sunbeltne.com). SunbeltNE is amongst the top franchise of Sunbelt Network, which is the world’s largest network of business brokers with presence in over 30 countries through 300 offices. Patel owns the franchise rights for the states of MA, NH, RI, VT and ME. SunbeltNE has expertise in steering buy and sell deals for Main Street, Franchises and Middle Market companies. Besides business brokerage, SunbeltNE offers services for strategic Mergers and Acquisitions, Cross Border Business selling and buying, Business Financing, Business Valuations and Transition Consulting.

• 1 Comments

  

Comments

Hey Satish,

Great article, I am going to save this for future reference!

Regards,
Will

 Posted by: William Black at October 23, 2008 7:16 AM

 Add your own comments

Name:

Email Address:

URL:
Remember Me? YesNo

Comments: (you may use HTML tags for style)

What next?

 Digg it

 Save This Page

 Subscribe to GetEntrepreneurial.com

 Leave a comment

Next Article: 5 Winning Strategies To Use For Getting Highly Targeted Traffic To Your Website »

Previous Article: Solutions Stars Video Conference »

Marcel Sim is a GE Network Expert. View Marcel Sim's profile or read more articles from Marcel Sim. Learn more about the GE Experts Network.

Have an expert opinion on issues entrepreneurs and small business owners face everyday? Join the GetEntrepreneurial.com Experts Network and share your expertise with the community!

The new GE Experts Network is inviting seasoned entrepreneurs and small business owners to come on board and contribute small business advice to our community of aspiring entrepreneurs. If you have an effective way of generating sales or you know how to use social networking to connect with your customers, join us in providing wider entrepreneurial content that would benefit small business owners worldwide.

Click Here to Learn More >>

Related Articles

 Local Paper Wrapper » Inhabitat: Here’s a source for gift wrap paper that is as beautiful as it is eco-conscious. Known as The Local Paper, these...

 Wine with Burgers » Iconoculture: It’s hard to speak pretentiously about terroir with secret sauce dripping down your chin. Los Angeles-based Learn About Wine’s Blind Date...

 Reknit Your Old Sweater » Springwise: Each month, Reknit will unravel old sweaters and re-knit them into a different item; this January, it's scarves. Consumers begin by...

 Marbling Art on Stone » Hurriyet Daily News: Saadet Erciyas, a female entrepreneur from İzmir, and her team are creating decorative products by using the marbling art...

Need more brand new promising business ideas and innovations around the world you wish you'd thought of? Visit CoolBusinessIdeas.com now!

Ever wanted to be the CEO of your very own Starbucks or Amazon.com? Fire your boss and be your own boss? Now you can, with BIZNESS! - the free biweekly business newsletter about new business ideas, opportunities and innovations from around the world. More than just new business trends, BIZNESS! helps the aspiring entrepreneur (you!) with small business advice, business tips, and entrepreneur resources and opportunities.

   Subscribe for free now!    

---