The Biz Blog
December 03, 2010 by Kendric Foultz
A strategic business sale takes place when the buyer finds additional value in the business for sale than the average financial buyer is able to identify.
Most small businesses for sale, if positioned correctly, will attract a number of possible buyers. But in some cases the business for sale in question might be so specialized in its market as to require a very unique buyer.
I recently brokered the sale of a specialized jewelry design and manufacturing business that posed this very challenge. The only viable buyers for this business were well known by the seller. These prospects did not know that owner was interested in selling his business and it was my job to keep it that way until we had secured enough general interest in the opportunity.
What we were able to find was that one of the companies had a weakness that could be solved by buying the business. In addition we realized that the worst thing that could happen to this particular company would be to have one of his competitors end up buying the business and there were no real viable alternatives. The prospect buyer probably knew that there were only a few other companies that would be interested in buying the business, but this particular company had a strong strategic motivation to purchase the business and was willing to listen to our pitch.
In the end the strategic business sale was transacted and the seller got a very fair purchase price including an employment agreement. These types of engagements require a lot more finesse than the standard business sale. In some cases you only have one shot to get it right and if not handled properly you can end up with an unsold business that will never sell. The old saying in selling a business that goes If you have only one buyer, you have no buyer can really have a devastating effect.
Sometimes when selling a business it can be such a niche that you really do have only one buyer and it takes a savvy broker to help you navigate the waters so that you can actually get it sold and get the kind of results you desired when selling your business.
Business Sales Process, How to Sell
