When it comes to selling an enterprise, finding the right buyers is half the challenge. It could be tempting for most business owners to settle for anyone who drops by with a generous enough offer. However, some goals during the sale depend on snagging a particular type of buyer. Some sellers, for instance, would want to retain partial ownership of the organization, which would make them more partial to some types of buyers.
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| Image source: integrabrokers.com |
Many buyers of lower-middle market enterprises are corporate strategics. Their acquisition strategies often involve breaking into new markets and diversifying their current range of products and services via acquisitions.
Private equity firms and family offices, meanwhile, represent an investment entity and focus mainly on finding companies to acquire, wherein they would make significant investments to boost the business' value. Their strategy on keeping businesses vary. Some retain their new companies for a set period to build its value, upon which it is sold. Other firms, family offices in particular, practice a buy-and-hold strategy and retain the companies in their wing in the long run.
It pays to align one's enterprise to the demands of specific buyers. Different categories of buyers look for different things in a business, and choosing to highlight these features would help attract more buyers of a particular type.
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| Image source: businessnewsdaily.com |
Generational Equity helps business owners navigate the process of selling their business. Visit its website for more on its approach to lower-middle-market mergers and acquisitions.
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