3 Steps to Finding the Perfect Buyer for Your Company
Finding the perfect buyer…
The odds of simply stumbling across the perfect buyer for your company are similar to the odds of getting struck by lightning – about 1 in 10 million according to the British Medical Journal. Or in other words, it could happen, but it most probably won’t.
So, if you want to find the perfect buyer for your company, you need to start searching – this is why research is an integral cornerstone of our service. In this article we look at the three key steps in researching for prospective buyers and why you need to look in some places you might not have thought about.
Step 1: Buyer Persona
This is a marketing technique which you may well be familiar with. Essentially, we need to create a profile that gives us an outline of what sort of company might be interested in buying yours. There are lots of questions that we ask in order to do this, but they fall under the following three categories:
What do they do?
The temptation here is to immediately think of competitors, but while they might buy, they are rarely the source of the best deals. On the other hand, of course, a company in a completely unrelated sector is unlikely to see the synergy value in acquiring your business. The ideal is somewhere in between, a company that is offering different services to the same clients.
Where are they based?
Over 50% of our clients sell to overseas buyers and almost all generate some interest from outside the UK, so it’s definitely worth looking beyond our own shores. Data from 2022 published by Refinitiv shows that the UK is, by some distance, the second most targeted nation for acquisitions. This is supported by our own data which shows that, at any given time, we are actively engaged with companies from 21 countries across our live projects.
Are they big enough?
This is a fundamental question at the heart of assessing their ability to execute on a deal. There is little value in approaching someone who couldn’t make a good offer, even if they wanted to. Of course, it’s not just about how much cash they have and even that can be tricky to assess, particularly outside of the UK where financial reporting requirements are less rigorous. You also need to keep in mind that some companies that look too small may be backed by larger businesses or even Private Equity money. Our skilled research team often have to be quite creative in determining whether a potential acquirer fits this category.
Step 2: Identify Companies
Now you know what a good buyer might look like you can start your search for companies that fit within that profile. A significant proportion of our costs as a business are dedicated to this area for three key reasons. 1 – you need access to good data and market intelligence, 2 – you need skilled people who can interrogate and then critically evaluate that data, 3 – it takes time, depending on the complexity of the project but we are talking weeks, not days.
There may be a certain number of obvious candidates and clients often feel they have a good idea who will buy them. However, they often find that they are surprised at where the interest comes from, and crucially where it doesn’t. One of our previous clients, Steve Lees, owner of ATE Solutions told us… “I always thought that we would sell to a competitor. Somebody who was in the electronics test market. I started off with a list of half a dozen companies I thought might be interested in us, so to find mainly overseas buyers was very much a surprise to me.”
Step 3: Qualify and Finalise the List
Creating a list is one thing, being able to use it is another. Ideally you will have a good rationale for each prospect identified and it may be tempting to make some assumptions about who the ‘top’ candidates are. However, in our experience it’s best to let the process uncover the interest and not to allow preconceptions dictate your approach.
The next part of this is identifying who within those organisations to contact and to obtain the right contact details for them. We typically target three senior decision makers for each prospect. As we are talking about quite senior people, this can be a challenging task. It often takes some clever tools, some lateral thinking, and some sheer determination… which is where we come in.
Conclusion
Finding the perfect buyer for your company is not an easy task, it is certainly highly unlikely that they will find you, so you must be intentional. There are resources available to help you do this, but many of the most useful ones are inaccessible to business owners. The skills and experience of the person doing the research is also of a high priority. Professional and experienced support in researching potential acquirers is critical to the success of any business sale process.
If you’d like to learn more about how Entrepreneurs Hub could help your business find the perfect buyer, please get in touch. Our team of trusted advisors are on hand to discuss your options with no obligation and in total confidence.
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FAQs – Selling Your Company
How do I sell my business in the UK?
Selling a business in the UK typically involves preparing financial information, obtaining a valuation, identifying suitable buyers and negotiating the terms of a sale. Most owners work with an M&A adviser to manage the process confidentially, approach qualified buyers and maximise the value achieved.
At Entrepreneurs Hub, we talk about five key areas that make the difference between success and failure when selling your business. Read more…
What is my business worth?
A business is typically valued by applying a multiple to its sustainable profit, often EBITDA or adjusted net profit. The appropriate multiple depends on factors including growth, recurring revenue, customer concentration, management strength, owner dependency, market conditions and buyer demand.
Determining what your business is worth involves more than applying a simple formula. Use our Business Valuation Calculator to obtain an initial valuation range, or read our simple business valuation guide to understand the factors buyers consider.
How long does it take to sell a business?
Selling a business in the UK typically takes around 12 to 18 months from initial preparation to completion, although some transactions may be quicker or take longer. The timeline depends on business readiness, buyer demand, deal complexity, due diligence and how quickly the legal terms can be agreed.
Preparing accurate financial information and organising key documents in advance can help reduce avoidable delays. Read our complete business sale timeline to understand what happens at each stage.
When is the best time to sell a business?
The best time to sell a business is usually when it is performing strongly, its future growth is clear and you are not under pressure to complete a sale. Buyers are generally more attracted to businesses with rising or stable profits, reliable financial information and credible opportunities for further growth.
Business owners are often in a stronger position when:
- Revenue and profits are growing or consistently strong
- Financial records are accurate and up to date
- Future growth opportunities can be clearly demonstrated
- The business is not overly dependent on the owner
- There is a capable management team in place
- The owner has started preparing well in advance
Market conditions can also affect buyer appetite and valuation. Factors such as sector growth, access to finance and competition between buyers may support stronger deal activity, but preparation and business performance are usually more important than trying to identify a perfect month to sell.
Ultimately, the best time to sell is when both you and the business are ready, and the company can demonstrate sustainable performance and future value to potential buyers.
Use our Exit Readiness Tool to assess how prepared your business is, or read our guide on when to sell your business for further guidance.
Do I need an adviser to sell my business?
You are not legally required to use an adviser to sell your business, but many owners appoint an experienced M&A adviser to help manage the process. An adviser can prepare the business for sale, identify and approach suitable buyers confidentially, coordinate negotiations and support the transaction through due diligence.
The right adviser can also help create competitive tension, protect your time and reduce the risk of avoidable mistakes. Read our guide to choosing the right business sale adviser to understand the different types of support available.
How do I prepare my business for sale?
Preparing a business for sale involves strengthening its financial performance, reducing risk and making sure it can operate successfully without heavy reliance on the owner. Buyers will also expect accurate financial records, clear contracts, organised documentation and evidence of future growth.
Preparation should ideally begin well before approaching the market, giving you time to address weaknesses that could affect value or delay the transaction. Use our Exit Readiness Tool to assess how prepared your business currently is.
How is confidentiality protected during a sale?
Confidentiality is protected through controlled information sharing, anonymised buyer approaches and non-disclosure agreements. Potential buyers usually receive limited information at the start of the process and must sign an NDA before commercially sensitive details are released.
Prospective buyers should be assessed before receiving further information, with documents shared gradually according to their level of interest and credibility. A well-managed process also allows the business owner to retain oversight of who is approached and what information is disclosed.
What documents do I need to sell my business?
The documents needed to sell a business commonly include financial accounts, management information, forecasts, customer and supplier contracts, employment records, tax information and evidence of intellectual property ownership.
Buyers may also request details of property, insurance, legal disputes, regulatory matters and company ownership. Organising this information before due diligence begins can reduce delays and help maintain buyer confidence. Our Business Sale Due Diligence Checklist explains the main information buyers are likely to request.
What’s the quickest way to sell a company?
Selling a business quickly is possible, but speed shouldn’t come at the expense of value or deal security Read more…
What’s the best way to sell a business online?
Yes, you absolutely can sell a business online. Many platforms specialise in connecting business sellers with buyers. Read more…
How can I increase the value of my business before selling?
You may be able to increase the value of your business by improving sustainable profits, developing recurring revenue and reducing reliance on individual customers or the owner. Buyers also value capable management teams, reliable financial reporting, scalable operations and clear opportunities for future growth.
The earlier you identify the factors affecting value, the more time you have to make meaningful improvements. Use our Business Valuation Calculator for an initial indication of value and our Exit Readiness Tool to identify areas that may need attention.