After investing a lot of time, money and effort into your business to make it successful, there may be a time where you start planning your exit strategy for the sale of your business. Whatever your reason for wanting to sell, you want to make sure you are going to get the most for it, at least fair market value if not more.
One of the benefits of working with a business coach on your exit strategy is that you will be better prepared to put your business on the market and get an excellent return.
There are a lot of people out there who are ready to spend money on your business, but just how much money depends on how valuable your brand is as well as the type of buyer. There are three types of buyers out there: the strategic buyer, the entrepreneur, and the opportunist.
1. The Strategic Buyer
These buyers pay the most. The Strategic Buyer is the one who is most likely to pay above fair market value for your business. This is because they have seen how successful your company is and they know that they are assured of a great profit once they take it over.
The Strategic Buyer could be someone who is a competitor in your industry or even one of your suppliers or clients. It can take anywhere from 18 to 36 months to locate a strategic buyer for your business.
2. The Entrepreneur
The entrepreneur is someone who is done with the corporate world and wants to buy a successful business that they can make their own. This could also be someone who is already a part of your team, such as a friend or family member in the business or one of your employees. The entrepreneurial buyer is also willing to pay fair market value for your business because they have seen first-hand how valuable it is. If you have a proven system in place, then a bank is more likely to provide the financing for the entrepreneur.
3. The Opportunist
The opportunist is the buyer you want to avoid.
He is looking for a bargain-basement business that will cost him little out of pocket while still giving him a chance at a huge profit. They often ask for unreasonable terms, like keeping you in your role to run the business or have you co-sign loans. This buyer is looking for businesses that may be struggling or owners who just need to get out of their business quickly and therefore want to pay well below fair market value.
When you work with a business coach, you will create an exit strategy that, while it may take time to execute, will ensure that you get the most out of the sale of your business without resorting to a quick sale to an opportunistic buyer.