Selling a Business: Are There More Buyers than Sellers?
One of our services at Exit Consulting Group is brokering the sale of a business. We frequently pair our clients with qualified buyers who purchase the company. The nature of this work puts us in conversations with both buyers and sellers.
When approaching the question of whether there are more buyers or sellers, first glance depicts more sellers. There are dozens of websites listing varieties of businesses. They offer countless online options, brick and mortar, work from home, franchises, and more.
From that perspective, there are more sellers than buyers.
Exploring the other side of the equation paints a different picture. It’s fascinating listening to buyers talk about their frustration finding a quality business to buy. Many describe looking at 20-30 before finding a business worth buying. After identifying the right business, odds are against closing the deal. Between contract details, negotiations, valuations, and agreeing on price, there are countless potential hang-ups.
Given this, we need to amend the previous statement. There are more buyers than quality businesses to purchase.
So, if there are more buyers out there waiting to purchase a good business, why aren’t they able to find them? 82% of businesses do not sell. Where is the disconnect?
It’s because sellers don’t understand what buyers are looking for. This is reflected in how they present the company, how they manage the finances, and when they time their exit.
It’s an interesting dynamic. Business owners spend their entire professional life focusing on selling their product or service to their customers. They adapt, change, improve, design, and even reinvent in order to better sell their product of service. Yet when it comes time to sell the business, owners don’t do any of the above.
What we come across instead is owners waiting until they are tired, losing employees, and starting to hit a downward cycle. That’s what these motivated and qualified buyers are encountering when they start searching the market. It’s no wonder they are discouraged about their options on the market.
Instead, treat the business as it is your most profitable product.
Buyers want cutting-edge businesses in their prime. A portion of the sale price will be in potential for the business to grow and succeed in the market. Your business needs to not only be in its prime, it needs to be enticing.
This means focusing on the areas that are most profitable and building measures to grow. Work to adapt to current market trends.
If you are planning on selling your business, partner with Exit Consulting Group today. We bridge the gap between your business and buyers looking to purchase through creating value drivers, navigating the timing, building transition plans, developing strategic transition plans, and marketing your business. It is the most comprehensive exiting service you will find out there.
For your largest and most important sale, partner with our experienced experts to position your business as one of the 18% that actually sells.