Marketing Blindly and Nationally

If you’re a savvy business owner, you know that maintaining strict confidentiality is critical when selling your business. Only a handful of people should know you’re thinking of selling: your spouse, financial planner, accountant, and attorney. Often, this element alone will push a seller toward engaging with a business broker who can market you blindly/confidentially. Having said that, marketing nationally is perhaps just as compelling a reason to engage a professional to market your business.

Most business owners have a limited sphere of influence which includes their immediate market area and maybe a few pockets of friends or acquaintances in other geographic areas. Business brokers, on the other hand, have access to all the business-for-sale websites that buyers visit in addition to a nationwide network of buyers. This provides a national reach that would be cost-prohibitive for an individual seller.

Increasingly, we’re seeing buyers from outside the seller’s market area and they are looking to:

• Leverage their current administrative staff
• Take advantage of low interest rates
• Lower risk through industry and geographic diversification
• Replicate their ability to hire and retain talent while managing virtually

What does this look like in real life? Let’s say we have a construction business located in Tennessee that is doing $3 million/year in revenue and has $750,000 in Seller’s Discretionary Earnings. The seller is looking to exit and can be replaced by a general manager who is good at leading and managing a sales team. It is very possible that a buyer who has a timber operation in North Carolina might see this blind listing on a business-for-sale website and inquire about it thinking he will spend $2.5 million on the acquisition, realize the synergies of using his timber company’s back office, put a general manager in place, and breakeven in 3 years.

As a seller, your best prospective buyer might just be outside your market and may not even be directly related to your industry. Make sure you are partnering with a business broker who can bring you all types of buyers allowing you to choose the best one for you and your family. Contact us when you’re ready for a confidential conversation about your options.