Those that have been competitors for your business all along might turn out to be the best options when you are ready to sell. They are usually not hard to locate because you would have been aware of them already. They also would seek to benefit from acquiring any business that would come up against them.
However they may sometimes try to get the business at a very low price from you or they might go through the buying process not with the intention of buying but to get information that they can use towards their own business. Therefore if you are discussing a sale with a competitor be very careful that you keep your information safe.
Competitors are Experienced at Business
When you are trying to sell your business one of the hardest things to do is to find a buyer that is serious and suitable to run your business. Listing your company on platforms like Businesses Buy Sell might see you going through a lengthy process of sifting through buyers. This is why a good way to find some suitable buyers is identifying your main competitors. They are the best persons to buy your business and operate it effectively.
Since they are seasoned owners of a business much like yours they will be more knowledgeable on the operations of your entity. If you sell to your competitor you can be more comfortable knowing that the business will remain afloat after you leave. With regards to financing, since they are established business owners they will more than likely be able to garner the funds for the purchase right away.
You also do not have to sell the entire business to them, you can simply sell the assets and sell the rest of the business to another buyer. Competitors usually like to make use of these sales because they will gain from doing so and because they will user get the items at a less expensive price. However when competitors buy businesses, they are usually willing to give more money upfront especially if they believe that they are making a good investment that will earn them a lot of profit.
Before deciding to make an offer to your competitors here are some things to bear in mind:
- You should not only consider companies that are directly offering products/services to the same customers that you do. Some competitors only offer their services to a small percentage of your customers and others do not offer to your customers but sell something that is in line with what you offer. Pitch the business to those business owners too. Do not limit yourself.
- Ensure that you do not allow yourself to be controlled by your competitors in the negotiation process. They will more likely have a tendency to do this because they know the business very well. Be sure to understand the worth of your business so that you can stand your ground and defend your asking price.
- Do not let your guards down when discussing your business information with competitors. It is not unusual for competitors to use business sales as a way to get information about your operations. Ensure that you use a confidentiality agreement to protect yourself from having your information being used against you.