A unique challenge of the process to sell your business is that you cannot advertise certain confidential details about the business, and yet you have to target and attract the attention of the right buyers. Specific details about the business such as business name, exact location and unique products or services offered typically cannot be revealed to the public because it could be disastrous if employees, customers, competitors or other third parties discovered the business is for sale. So, how do you confidentially market your business for sale and attract the attention of the right buyers. The answer is there are several possible options for developing a successful confidential marketing plan for taking your business to market, and you develop a custom plan that will best fit your unique business.
If an appropriate method for taking your business to market is to advertise to the public; using business listing websites, business trade journals, trade shows or any other appropriate advertising medium can be effective. Or, a more targeted marketing strategy might be best for your business. You may know specific buyers who would be interested in your business, and industry research can be performed to identify a list of potential buyers within your industry. In this targeted approach, the best strategy may be a proactive direct mail and phone campaign to contact this group of buyer prospects. It also might be appropriate to execute a broader strategy that includes both public advertising and targeting a select group of buyer prospects.
Regardless of the marketing strategy that is right for your business, key tools that could be used in this process are some form of public advertisement and/or business profile that is often referred to as the “blind profile”. The profile is blind because it does not reveal confidential information, but does provide key facts about the operations and financial performance of the business that buyers need to see. Multiple versions of the blind profile might be required for your business if different types of buyer prospects are contacted. A blind profile typically contains more information about your business than a public ad. It is often sent to a buyer after they respond to an ad and is sometimes included with a letter in a direct mail campaign.
The most widely used form of public advertising for businesses on the market are the business listing websites. The listing sites allow business owners the flexibility to provide a comprehensive profile of their business without disclosing confidential information. Search options are available on listing sites that allow buyers to search for businesses by criteria such as type of industry, geographic location, sale price, annual revenue, cash flow, availability of owner financing, etc.. And, there is the option to search by keywords to find a very specific type of business. An experienced business broker knows how to write a listing site ad that will best describe your business such that it will be found and read by the right buyers. Too often, business owners provide a very poor description of their business. In my experience with buyers, they often express frustration about the difficulty in finding businesses on listing sites that are accurately described with all of the key information they need to see to determine if it is a business they want to pursue. This is one of the major reasons why some businesses do not generate strong buyer interest or catch the attention of the right buyers on listing sites.
Top business brokerage and M&A firms have marketing and industry research staff to support their brokers in developing the marketing plan, blind profile and other marketing documents that will be used for their clients. They have access to various sources of industry data sometimes needed for identifying a list of potential buyers for a business. These firms have also developed several third party relationships that give their clients the best and broadest possible exposure to top buyers in the marketplace. They have relationships and affiliations with various state, national and international Business Brokerage and M&A associations. And, they are in contact with thousands of Private Equity Groups, corporations and other possible sources of buyers.
The successful confidential sale of your business largely depends on developing and executing the right marketing plan for your unique business. Failure to take a business to market the right way has resulted in businesses not selling or businesses being sold well below market value. If you are selling your business and need expert guidance through the confidential process, you should consider the services of a business broker. The investment in the services of a business broker could result in recognizing an after-tax gain on the sale of your business that will easily justify the broker’s fee.
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This has been a JBF Business Media production.