Finding the best buyer for your business
Research sources of potential buyers
There are many sources for finding potential buyers. Internet and database searches or industry and competitor analyses are only two examples of common search practices. The M&A advisor has the resources and tools to identify and approach potential buyers. A strong national and international network is vital in this regard.
Based on the research done, an assessment needs to be made to decide whether a company qualifies as a potential buyer or not. It is important to check whether the owner’s strategy fits within the potential buyer’s strategy and whether the buyer has the financial means for a possible transaction.
How to approach potential buyers
The approach process must be discussed and determined from the start. A discreet competitive process is usually preferred to avoid early disclosure of the target’s identity and create a competitive bidding situation.
The approach and the evaluation of interest are usually done by the M&A advisor on an anonymous basis. This ensures that there is no untimely contact between the potential buyer and the seller or the selling company, which could have a negative impact on the bidding process or the business’ performance.
4 Mistakes To Avoid When You Search And Approach Potential Buyers
- Insufficient analysis of potential buyers
- Approaching direct competitors too early and not anonymously
- Inflated concerns regarding confidentiality
- Creating a teaser that is too vague to generate initial buyer interest