Finding the right buyer for your business is a critical step in selling your business – probably the most important.

The Vetting Process: Worth Its Weight in Gold

A good business broker (or intermediary) will vet-out the buyer in such a way that guarantees that you are dealing with a reputable individual or group that is purchasing your business.

Most buyers that have the type of money that we are talking about to purchase your business didn’t get that money by being an idiot. If they did, a quick Google search and a few reference calls will show this sooner than they can admit, “I’m not really qualified.”

Your broker will not just consider the financial equation (although that’s vitally important) but will also look at experience, reliability and the right “fit” for your company. For instance, does the buyer have relevant experience that will relate to your business? Maybe, maybe not; prior experience doesn’t always have to align perfectly.

Experience: (Also) Worth Its Weight in Gold

Case in point: the buyer that I sold my business to was a suitcase salesman. Yes, that’s right; he sold suitcases to department stores. You may say, “How does that guy have the right experience to sell janitorial services to multifamily housing complexes?”

Well, let’s stop seeing suitcases as apples and janitorial services as oranges and put like experience with like experience instead. After all, this wasn’t just any suitcase salesman. It just so happened, he was a top salesman of a very high-price, high-quality kind of luggage. Well, it just so happens our business was known for its “high-quality” image in the janitorial business. Now, instead of apples and oranges, suddenly you’ve got like with like.

He was also as experienced in dealing with executives over many location department stores as he was used to dealing with the local saleslady that couldn’t care less about what luggage to use; she just wanted to make sure that customers didn’t come storming back in to complain when the luggage was destroyed at the airport. Well, as you can see, his past experiences in luggage sales also made him perfect for the janitorial business.

My business needed someone with sales experience. I had a manager that was awesome at running operations, but he was terrible at getting new business. As it turned out, this new buyer couldn’t just go to individual apartment complexes and sell our high-priced janitorial services, but he could meet with the management companies that managed 30 and 40 complexes to convince them to let us into all the complexes.

Now, this was not that difficult for a good salesman. But the hard part was convincing the local manager that we were worth the extra cost and we would take care of their needs without their new tenants coming back to complain. Suitcases or janitorial services, soap or CDs, Mustangs or Maseratis, a good salesman isn’t good because of what he sells; he’s good because of how he sells.

Turns out, this buyer was perfect!

The Right Buyer Can Put Your Mind at Ease

Now that I sell businesses for a living, it amazes me how many perfect buyers we find for folks just like you every single week. Now, keep in mind, this is not a sales pitch – just an explanation of the benefits of working with a quality brokerage firm that wants the best for both the buyer and the seller. And trust me, putting two wrongs together in a deal never makes a right.

Another case in point: I was in a manufacturing plant the other day taking a tour with the seller and a prospective buyer. As we were walking around the production floor during a certain point in the tour, I pointed at an item that the business manufactured and asked the dumb question: “What is that?”

The seller picked it up and began to look at it slowly and then said, “I’m not really sure.” To that the buyer chuckled and said, “That’s a high-pressure water valve that is used in blah, blah, blah application…”

Believe me, it didn’t end with “blah, blah, blah” either. In fact, he told me more than I ever cared to know about that particular valve! The point is that, in this case, the buyer knew more than the seller about something that the seller’s business actually produced.

Now, how well do YOU think this buyer will do in the business?

Scot Cockroft is the owner and president of Huntington Business Group Inc. a VR Business Sales firm in Dallas (www.vrbigd.com). To learn more about Seller Financing and Finding the Right Buyer for Your Business, read Part 1: How Do I Know If A Business Purchaser Has The Experience to Run “My” Business

VR Huntington Business Group, located in the heart of the DFW Metroplex, serves the entire Dallas-Fort Worth Metro area as well as North Texas. The company specializes in Business Brokerage, Mergers & Acquisitions, Business Valuation and Consulting services focusing on small businesses and mid-market companies.