Find your dream buyer
Creating a market of prospective buyers ranges from targeted outreach to completely open auctions. Thoughtfully prioritize desired attributes, then thoroughly research options.
How should you find buyers?
There are three main approaches, each with tradeoffs:
- Auction Model: Promoting the sale opportunity broadly often leads to competing bids and better price discovery but provides little control over buyer fit, follow-through, or post-close plans for the company. Most auction deals fall apart in diligence.
- Targeted Outreach: Directly contact a select few qualified buyers based on priorities around experience, temperament, leadership styles, and vision for the company's future. More certainty by sacrificing exposure.
- Hybrid Approach: Leverage business-for-sale marketplaces like Rejigg or digital investing platforms to create initial buyer interest, then vet respondents carefully based on values and partnership philosophy to filter options.
In our experience—and the experience of many small business owners—the hybrid approach is the most effective way to navigate this process. It’s why we built Rejigg (which is our version of what a perfect hybrid approach looks like).
We believe you’re better off with a hybrid approach for a two primary reasons:
- You’re more likely to find quality buyers. With the auction model, there’s a good chance that ~90% or more of the buyers aren’t even a remotely good fit for your business. You’re just throwing a dart and seeing what sticks. This means you’re at risk for a buyer you don’t like taking over your business. When you use a marketplace like Rejigg, you’ll get access to a number of pre-vetted buyers—not random people on an auction platform.
- It’s much easier to find and connect with buyers. The targeted model solves some of the problems that the auction model does, but it’s difficult. For one, where do you find buyers? Even if you do find a way to do outreach to buyers you think are a fit, it’s incredibly time-consuming—and you’re likely missing out on thousands of potential buyers who could be an even better fit. This is what Rejigg solves.
The different types of buyers
Each buyer type has distinct priorities:
- Financial Buyers seek market-beating financial returns through operational improvement, growth initiatives, and multiple expansion. Subtypes include private equity funds, search funds, wealth management funds, family offices, and corporates.
- Strategic Buyers acquire companies to expand capabilities, outmaneuver competitors, and gain market share. They already participate in your industry as competitors, major suppliers, or key customers in your value chain and ecosystems.
- Owner-Operators buy both the job of managing the company and the equity ownership. Will have expectations around retaining operating control and involvement post-sale depending on background.
How to evaluate buyers
Once you’ve got a few target buyers in mind—through, for example, a platform like Rejigg—you’ll want to vet them carefully.
Ask qualified buyers directly about their:
- Target holding periods for acquisitions
- Post-close changes planned for leadership and governance
- Philosophies on maintaining company culture, treating employees fairly, and community impact
- Past deals completed and those fallen through
If this is a buyer that’s purchased small businesses in the past, see if you can get in touch with the former owners of those businesses. Ask them about their experience with the buyer. And, if you can, get referrals from former business partners or employees of the buyer. If it matters to you, figure out what kind of person they are.
Treat the buyer vetting process somewhat like hiring an employee: you want to be thorough, check references, and don’t feel bad about asking specific, difficult questions. This is your business, after all. You deserve to get the answers you want to any questions about the buyer.
