How do you reach Prospective purchaser?

You may seek to obtain an offer by word of mouth, contacting people known to you, usually within your industry and enquiring whether they might be interested in buying the business. Whilst you may be able to directly contact some interested parties within your industry with a high level of credibility quite quickly using this method, it does have the dangers of limiting the pool of prospective interested parties to those you know, without exploring the potential of sales to financial institutions or to trade parties outside your industry, and if unsuccessful can leave you with the problem of being seen as tainted goods in the marketplace.

You can of course advertise your business for sale. You can place your advertisement in your own trade press, the national press, or some of the specialist business press. You can also advertise openly or covertly and directly yourself or through an agent.

The appropriate approach will depend broadly upon the nature and size of your business. If for example you are selling say a small sub post office or shop, you might well consider advertising directly yourself through a publication. You might also consider engaging an estate agent to assist in selling the business who will act as both a broker to help negotiate the sale, but also as an advertising agent to ensure that the business for sale is publicised as part of the advertisements they run.

For a larger business you might consider advertising it for sale in say the national press. Most newspapers will offer a box number service that will enable you to maintain confidentiality of the name of the business for sale since all responses to the advert can be directed to a box number rather than the name of the business. This enables you to screen the replies received before deciding with which to proceed.

Additionally, there are now online listings of businesses for sale and business opportunities. You can use these in much the same way as you would use a financial times or other national press advertisement.

The limitation of the advertising approach is that it does not guarantee that the fact that your business is for sale is brought directly to the attention of people who may well be specifically interested in buying it.

The final method of reaching prospective purchasers and the one that I would recommend for any business of a reasonable size is to pro actively identify potential interested parties and approach them with news that the business is for sale. This can of course be combined with a normal advertising approach in order to get the best of both worlds. As almost the first part of the selling process, you corporate finance advisor will generally discuss with you whether you have a list in mind of potential interested parties which will generally comprise suppliers, customers and competitors. Using the list as a basis, your advisor will then seek to expand it by searching databases to identify businesses of a relevant size and type within the same industry who operate in different areas who might wish to consider expanding in your locality, potential purchasers from outside your industry who might be interested in moving into it, and if your business has the right profile, potential financial purchasers who might be willing to back an MBI (a management buy-in to your business where a venture capitalist provides the funds for an external team of managers to buy your business in order to take it forwards). Your advisor will then prepare an initial approach letter.

If you are concerned about the costs of engaging an estate agent or a corporate finance advisor to sell your business you might consider advertising it yourself in the appropriate media using a box number, and considering the responses you receive before deciding whether to engage a professional. So long as you can ensure that confidentiality is maintained, you have generated a number of potential enquiries the your professional advisor can either follow up or use to suggest other prospective interested parties to approach.

Whichever method you choose, the important thing is to put together a structured plan as to how you are going to approach selling. After all to sell your particular products or services you will have had a marketing plan to target the appropriate prospective clients, have considered what it is they might want to know about your products in order to make them want to purchase, have approached them, provided them with the information, and looked to close the sale to get the deal done. The general principles of selling your business are going to be much the same.