How to Find a Buyer for Your Business
SADC and CAE expert advice
How to plan your business succession?
For a small business owner looking to retire or simply change jobs, finding a buyer is challenging, especially in a regions. In general, transmission projects are confidential, to avoid destabilizing employees and weakening customers. Since few sellers announce their desire to sell with great fanfare, how can a rapprochement with potential buyers be envisaged and a successful succession take place? Follow these steps to publicize your transfer offer gradually and discreetly.
1. Finding a buyer for your business: planning is key
As mentioned above, finding a buyer for your business can be a challenge, business succession cannot be improvised! Between the moment when you think of selling your business and the moment when the transition will be official, several years may pass. Planning your departure in advance is therefore an excellent way to ensure the retirement you want.
Take the time to define your goals. Do you want to sell your business quickly or in several years? Do you plan to cease all activity or to pass the torch gradually while remaining active in the company? Do you want to sell to the competition or preserve the independence of your business? The answers to these questions will allow you to identify the buyer profile to seek.
Taking the necessary time to draw up a solid business succession plan will also allow you to test the waters around you, since it is essential to communicate your intentions and check the interest of the next generation. Start talking about your project to your relatives, your current employees, some of your clients, your professional network, etc. Perhaps the idea of taking up the torch will make its way to one of them to offer you the perfect match.
Finally, start delegating some tasks to empower your staff and focus on executing your plan.
2. Identify buyers for your business
The profile of your future buyer is already beginning to take shape among different types:
- Family takeover: The business is transferred to one or more members of the owner’s family, generally from one generation to another.
- Internal takeover: One or more employees acquire the company for which they work.
- Takeover by an entrepreneur: The buyer is an entrepreneur from outside the company who arrives with a whole new perspective.
Regardless of the profile of the buyer for your business, they will arrive with their own roadmap, experience, personality and vision of things. They will be different from you, so do not bother looking for a clone of yourself! It is best to refine the search criteria and stick to the essential skills or abilities that they must have (customer relations, market knowledge, know-how) for better targeting.
To find a good candidate, mobilize your close personal and professional networks first: family, friends, customers, even suppliers. To increase the chances of finding a buyer, it is wise for a transferor to widen his circle by frequenting networks of local entrepreneurs.
The best door to knock on? The SADC and CAE consultants near you are important allies who know the local market better than anyone. Their networks, their partnerships and their exchanges under cover of confidentiality often lead to the discovery of potential buyers.
3. Consider human factors in your business succession plan
In addition to the transferor himself, loved ones, employees and partners will certainly go through a range of emotion and a lot of stress during the process. A key aspect of your business succession plan that should not be overlooked is the human aspect behind the process. Consider in advance each of these human factors vis-à-vis different stakeholders:
- Does he share the culture of the company? Do its values match?
- What are his management skills and leadership style?
- What is his vision for human capital?
- Do you have a plan to effectively communicate the change to employees
- How involved do you want them in the transfer process?
- Are employees at risk of leaving? Do you have a retention plan?
- Do you have a good network to support you? (coach, family, mentor, specialist advisers)
- Have you considered the follow-up to your departure, what will be your activities? How to fill the void?
- Are you ready to let go?
4. Finding a buyer: support from a third party
You have worked for many years to bring your project to where it is today, so surrounding yourself with a good team is essential for a successful transmission. In a commercial transaction of such complexity, several professionals are called upon to intervene: lawyers, notaries, accountants, and even psychologists or mediators.
Surround yourself with a competent consulting team that you trust;
- Accountants: for a fair value of your company and realistic financial forecasts adapted to future operations.
- Notaries/tax experts/Lawyers: for the choice of the best sales scenario according to well-calculated and desired tax and heritage impacts.
- Financing and succession specialists: to align your expectations with realistic financing scenarios that are in harmony with the value of your business and the prequalification of the buyer.
In addition to these professional services, did you know that SADCs and CAEs offer personalized, neutral and 100% confidential support to sellers and buyers? Their expertise in business transfers and their extensive knowledge of the business community in their region facilitate the takeover process for all parties involved.
To avoid embarking blindly on a takeover process, the expertise of the advisers of your local SADC or CAE can be a solid boost.
Written with the collaboration of SADC Laurentides advisors.
Rédigé avec la collaboration des conseillers de la SADC des Laurentides.