What Makes A Motivated Business Buyer?
Business owners often do not realize the amount of effort required in putting together the sale of a business. A real business buyer (not just a looker) needs to be a person with the financial capability, aptitude and risk appetite to see a business sale through to completion. This article will examine some factors which might make a person a motivated small business buyer.
New Immigrant
New immigrants to Canada are usually quite motivated to establish themselves economically in their new home. Historically, immigrants from all countries have displayed an above-average aptitude for small business ownership which is most likely a result of their increased level of risk tolerance. This increased aptitude for taking on risk transfers over well to the business world where there is no guarantee of success.
Former Small Business Owner
A person who has just sold a small business usually makes for a motivated business buyer. A former business owner already knows what it is like to operate a company and has already demonstrated their willingness to take on risks and challenges. Also, if the business has recently been sold they might have some money at their disposal to invest in a new venture. Former business owners are typically not the type of individuals that would be able to go into the corporate wold after experiencing the relative freedom to make their own decisions as an entrepreneur.
Key Employee or Employees
Sometimes when a business owner is ready to retire there exists a key team of employees who have the experience and ability to operate the company. Usually, the missing pieces for this group of buyers is the financial ability. If a seller is willing to participate with some vendor financing then there may be a good deal for both parties to be had.
Another Business
With the increasing number of baby boomers seeking retirement, some very good business that are retirement sales will be coming onto the market. There exists an opportunity for a competitor or complimentary business to acquire such businesses. Another business could be a very motivated buyer if they see the opportunity for potential cost reductions or strategic initiatives that can increase the enterprise value of both entities. Management is usually built-in to the deal and the learning curve to learn the business is not as steep either.
The above examples are only a few possible examples of what might make a motivated business buyer. Talk to a business broker experienced in your industry and always consult with an accountant and attorney before committing to any deal.
