The fact is that, in the end, only a single buyer is needed—but finding that buyer usually requires several prospective buyers along the way. While in the past many business successions were handled internally, with an employee or family member taking over management, most business successions today are handled externally. Specifically, this means that a suitable prospective buyer must first be found.
However, before the search for a buyer begins, thorough preparation is the top priority. This includes a careful analysis of the business, the creation of a compelling company presentation (“What am I selling?”), and, most importantly, the development of a clear sales strategy (“To whom am I selling?”). Communication with potential buyers is based on this strategy. In addition, realistic expectations regarding the target sale price should be established. A professional business valuation by an experienced consultant can provide important guidance here.
This step is followed by approaching prospective buyers. In many cases, business owners already have a specific image of their successor in mind and are convinced that this person must be just like themselves. In practice, however, things often look different. In countless cases, the new owners come from other industries, have a different educational background, and must first familiarize themselves with the relevant field.
It is therefore important to remain open-minded and initially approach several potential buyer groups. These include, among others: (1) individuals acting as investors or entrepreneurs, (2) individually identified strategic prospects (suppliers, customers, competitors), and (3) institutional investors (private equity firms, family offices, etc.). Experienced advisors know the specific requirements and expectations that certain buyer groups have regarding the asset and the sales process; they can take these into account accordingly and prepare the seller for them. Specialized consulting firms also have access to a broad network and databases of potential buyers who can be specifically targeted and contacted depending on the asset being sold.
Since a company is not a “standard commodity” but a complex entity, the sale and the search for prospective buyers involve search costs. These costs must be minimized, while at the same time the number of prospective buyers should be maximized—which is actually a contradiction in terms, since the effort involved increases as the number of interested parties rises. The strengths of a professional, structured process are particularly evident when communicating with prospective buyers. An experienced consultant can manage the labor-intensive process of communicating with potential buyers, thereby significantly reducing the seller’s workload and ensuring the required professionalism as well as confidentiality. In addition, an expert is familiar with the pitfalls that can arise during sales negotiations and knows how to navigate them.
Finding the right buyer remains the key challenge in selling a company—a professional approach and a structured process can significantly increase the chances of success. And in the end, all it takes is that one buyer. But finding that one buyer is the challenge.
