Lots of people want to own their own business, and the majority of them would prefer to buy an existing business so they don’t have to build it from the ground up. The problem is that many of these potential business buyers don’t have any idea about what kind of business to buy, so many of them automatically default to what they know from daily life and look into retail businesses, particularly food retail.
For the baby boomers, who currently own over half of Australia’s 420,000 small businesses and are looking to sell their business and retire comfortably, this can be a cause worry. They need to earn at least $60,000 per year on average to retire comfortably, and they’ve reinvested most of their extra money back into their business over the years, making the sale of that business a necessity for retirement. But how many people are looking to buy a niche business with special skills like powder coating, or small operations like an event management company? Will they be able to find a buyer at all?
According to Steve Finn, the owner of Australia’s largest business broker network, The Finn Group, the answer is almost always “yes”, it’s just about the process of finding the right buyer. ” Just because their business hasn’t sold in a few months doesn’t mean it’s a bad business or that no one wants to buy it; it’s just part of the normal selling cycle that if you’re in a business with little demand and potential buyers, it can just take longer to find that right buyer,” says Finn.
His broker network prepares Due Diligence and Business Profile documents for every client at the beginning of the process, then markets them to their database of over 50,000 registered buyers, in a targeted way. Knowing what potential buyers want to achieve with a business is key. In fact, more than 50% of Finn’s buyers don’t end up buying the type of business they initially inquire about, instead buying the business introduced them to after helping them to define their goals.
One such example was a business that cleaned blinds and curtains off-site for commercial and residential customers, the owner of the business was sure he wouldn’t find a buyer. Finn’s team went to their database and found a registered buyer that they thought would be a good fit. “We said to the buyer, ‘Why don’t you have a look at this particular business because it seems like it might tick a few boxes for you’ – so they did and they ended up liking it and buying it,” Finn said. “They would have never considered buying that business unless we had actually taken it to them and asked them to consider it with an open mind.”
In another case, a man who owned and ran a profitable glass business had similar concerns. The eventual buyer agreed to buy 60% of the business, leaving the original owner with 40% of a multi-million-dollar business but still able to retire. This was a win-win situation because the buyer only needed 60% of the funds to buy it.
Finding a buyer for your business is a matter of knowing how to prepare your business for sale and knowing how to market it to the right people. If you have a niche business to sell that you worry won’t attract buyers, rest assured that with experts handling the process and an existing database of buyers, in many cases, the perfect buyer can be found.
