When it’s time to sell your business, how do you target the buyers who are the best fit for your business? In this article, we will discuss who are the Strategic Buyers for your business.
What is a Strategic Buyer?
As the name indicates a strategic buyer purchases other companies that they see as a good strategic fit with their own.
They are often a bigger company that is well capitalised and less concerned about generating quick returns.
Instead, they will be looking at synergies between the two companies. If they see that your company, in their hands, will give them more benefit than the intrinsic value of your business, they are likely to pay a premium for your business.
Who are the strategic buyers for your business?
Consider who is out there in the world of companies that could have a massive advantage by bolting/merging your company into theirs.
A lot of business owners are so consumed in selling their own stuff that they think an acquirer wants to buy them with the sole focus of being able to just sell more of their stuff.
But it’s actually more common to see the inverse.
Let’s look at a couple of examples:
When Microsoft acquired Skype they weren’t trying to sell more Skype stuff. Microsoft bought Skype to be able to sell more Microsoft products.
Don’t fall into the trap that it’s all about “your business”...think about what leverage your business will give them.
Another example is when Google acquired Frommer’s, the travel guide business. Google wasn’t trying to sell more travel guides. Google was acquiring Frommer’s search data and they paid $22 million for that privilege. If the owner of Frommer’s had thought about their goal of selling more travel guides, then Google would never have acquired them. It was all that built up years of search data that Google was after.
So when you are thinking of a strategic buyer for your business...Channel these thoughts
It’s NOT about ME, it’s about YOU.
At Exit Advisory Group we help entrepreneurs maximise company value and exit at the top of their game.
We do this by giving business owners the tools and strategies to design more profitable, efficient and enjoyable businesses to own - that are also less dependent on them. When they choose to exit, they are in the best position to unlock the wealth in their business and be rewarded for their hard work.
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