Tip #116: The 3 Types of People Who Buy Businesses

tip 117: the 3 type of business buyersNo matter how complicated it seems, you have one goal when you buy a business: to sell your business for a good price to a qualified buyer.

The vast majority of buyers fall into one of three categories, so it’s a good idea to educate yourself before the process begins. Deciding which type of buyer best suits your company will help you sell your business for the best price to the buyer who will be able to continue your legacy.

Individual Buyers

An individual buyer is someone who is looking to take over a business themselves, instead of starting one up from scratch (even though taking over a business is just as, if not more difficult, than starting up your own). When this buyer acquires the business, they will typically be very involved with running it, using the profits to sustain themselves and their family.

Often, an individual buyer is looking for a life change. Perhaps they are burned out from a career in corporate America. This type of buyer is usually a good fit for a small to mid-sized business.

Strategic Buyers

These buyers tend to be involved in a type of business that’s similar to yours. They are looking to integrate your business with yours, combining their assets and eliminating some competition.

For them, this is an opportunity for growth, since it gives them the chance to combine their product line or services with yours.

Financial Buyers/ Private Equity Groups

Financial buyers often go after larger companies. Usually, this type is made up of investors who strategically purchase, invest, and resell profitable businesses in a particular geographic region.

Typically, financial buyers are Private Equity Groups (PEGs). PEGs operate by acquiring a platform business that provides a stable foundation for growth, before adding on other businesses to support that growth.

Need Help Deciding What Type of Buyer is Best for Your Business?

The Bridlebrook Group has the knowledge and experience to determine what type of buyer should take over your business, and we will vet any buyers who are interested before you make a final choice. To get started with our services, call 610-324-7066 or fill out our online form.