How to Market Your Business for Sale
Even the most successful business won’t fetch top dollar if prospective buyers don’t know it’s for sale or understand the advantages it offers a business owner. You’ll need a marketing plan to get eyes on your business listing, convey the value of your business to potential buyers, and achieve the highest possible sale price.
To market your business successfully, you’ll have to:
- Get your business records and operations ready for examination by potential buyers.
- Identify the most likely buyers for your business.
- Determine the best marketing channels for reaching prospective buyers.
- Tell a story that highlights the best attributes of your business.
- Craft attention-getting ads and for-sale posts.
- Create a selling memorandum that focuses on your business’s future growth potential as well as its track record.
Let’s break down the steps for creating your marketing plan.
Before You Market Your Business, Make It Marketable
A well-planned and executed marketing strategy won’t compensate for a business that hasn’t been adequately prepared for sale. Fuzzy or disorganized records, unclear or undocumented procedures, messy work areas, glitchy computer systems, or equipment in disrepair all spell risk for potential buyers. Eliminating perceived risks will help you achieve the highest sale price. Before you put your business on the market for sale:
- Get a business valuation from a business broker, appraiser, or market comp analysis.
- Explore ways to increase your customer base and revenue streams.
- Look for areas to cut expenses to increase profitability.
- Clean up your books and financial statements, including balance sheets, P&L statements, and cash flow analysis, so prospective buyers can readily see where your revenues come from and the expenses of the business.
- Organize business documents, including licenses, permits, and business formation documents.
- Tidy up your facility and spruce up your online presence.
- Document processes and procedures.
- Train employees to work effectively with or without you.
Update Your Business Profile
Entrepreneurs tend to think about their businesses intuitively, but marketing a business for sale requires a more detailed business profile. Taking stock of the industry where you operate, the geographic territories you serve, your ideal customer, the competitive advantages of your products and services, and what makes your business unique will help you to identify the most likely buyers and craft a compelling marketing message.
Think about the characteristics that contribute the most to the value of your business. Make your business profile specific to your business and use your own experience to focus on the characteristics that would make potential buyers sit up and take notice.
- Is the business located in a densely populated area with a growing economy?
- Does your team or management stand out for its abilities and performance?
- Are your products in high demand?
- Do you have a large percentage of repeat customers?
- Is your type of business, product, or service in high demand?
Serious business buyers will want to look into every detail of your company, but it’s impractical to provide that kind of detail when you are in the early stages of marketing. Besides, you don’t want to broadcast sensitive information to prospects who might be kicking tires or competitors trying to learn more about your business.
By distilling a few of the best characteristics that define your company, you’ll be able to entice buyers without giving away too much information too early in the selling process.
Identify Potential Buyers
When you have clearly defined the attributes most likely to appeal to a new owner, it’s time to identify the most likely buyers for your company.
Consider whether the nature of your business requires a local owner or someone from within the same industry, or whether a new owner would need specific credentials to effectively run the business.
Depending on your business and the attributes you defined, your list of potential buyers might include:
- Owners of other businesses
- Competitors
- Suppliers in your industry
- Family members
- Employees
- Private equity firms
If you’d like to continue to be actively involved in your business, you might also consider investors or financial buyers who might be interested in buying a company with a ready-made management team.
Decide on the Marketing Channels You’ll Use
Many types of marketing channels will get the word out about your business, including:
- Social media
- Business-for-sale websites
- Local or national newspapers and trade journals
- Business organizations, such as chambers of commerce
You’ll want to choose the channels that are most frequently visited or viewed by your likely buyers. Depending on your timeline and your likely buyer list, you might choose several channels in combination or successively.
Let’s look at each channel more closely.
Social Media
Posting or advertising a business for sale on social media is likely to attract the largest number of views simply because of the reach of these platforms. Rely on your potential buyers list to choose the best one for your business.
For example, Instagram would be an effective platform for a business owner selling a graphic design firm or hair salon. But if you are marketing a restaurant or a car repair shop, Twitter or Facebook might be a better option. And LinkedIn might be your best bet if you want to attract private equity firms or professional services providers.
Business-for-Sale Websites
Most business buyers are going to search online for business for sale listings, so it makes sense to list your business where the most people are looking.
Business-for-sale websites such as BizBuySell and BizQuest are popular options for small business owners and financial buyers seeking an acquisition. These websites allow potential buyers to search by industry, state, and metro area so you can target buyers who own similar businesses or related suppliers in your region.
Newspapers and Trade Journals
National newspapers are best for selling large businesses, but local newspapers are a more cost effective option for small business owners. These publications often have classified advertising sections devoted to businesses for sale and make a good source of leads for those targeting local buyers.
To reach buyers from specific industries, consider advertising in trade journals. These publications sometimes have classified advertising sections as well.
Business Organizations
Business organizations, like chambers of commerce, often sell advertising in their newsletters. These channels can be useful whether you are looking for buyers from outside or within your industry.
Direct Marketing
When you have a limited pool of buyers or you want to attract a select group of qualified buyers, consider reaching out directly to your targets. You can email, call, send a letter, or contact prospects through their social media accounts.
Consider Hiring a Business Broker
A business broker will add cost to your marketing plan, but the additional expenditure can pay off in time saved, a larger pool of qualified buyers, and a higher sale price. A business broker can keep the sales process moving while you continue to run your business, help craft your marketing messages, and create a selling/confidential information memorandum.
These professionals also have a database of qualified buyers so they can put your sale listing in front of prospects you might not otherwise reach, speed up the time it takes to get a deal signed, and help keep your marketing efforts confidential, an important component of the sale process as you’ll see below.
Advertising Your Business for Sale and Keeping It Confidential
When you advertise your business for sale, you’ll have to give prospects enough information to whet their appetites, but not so much information that outsiders can identify your business. If your plan to sell your business leaks, it can affect employee morale, give competitors ammunition to use against you, make customers wary of doing business with you, and even derail a successful sale.
It’s also important to keep your most sensitive information, like your business metrics, confidential until you are certain you’re dealing with serious, qualified buyers who are genuinely interested in making a deal.
So, how do you advertise your business without revealing its identity or financial records?
This is where the work you did to distill the most important characteristics of your business will come in handy. Use an attention-getting title that gets to the heart of your business success with bullet points to elaborate on your business’s features and benefits in your ads.
For example, instead of revealing your actual profit margins in a sale listing ad, you might write an ad title like this: “Highly profitable graphic design firm with established customer base available for sale.”
Once you’ve qualified prospects, they’ve signed a non-disclosure agreement (NDA) and a letter of intent, and the due diligence process starts, you’ll be required to reveal the financial and operational details of your business. Until then, you’ll have to depend on your advertising message to bring buyers in the door. When it comes to marketing your business for sale, the goal is to get your business in front of as many qualified business buyers as possible. Leverage several marketing channels simultaneously, so that you can generate multiple offers and have options for negotiating the terms. In addition to marketing to your professional network, list your business for sale on BizBuySell to reach various audiences that including the broad business for sale market, local business owners that may also serve your customers, and your competitors.