Marketing a business for sale is a difficult task requiring skill, knowledge, and experience because a desire to announce the acquisition opportunity to potential buyers is governed by a need to keep the information confidential from employees, customers, competitors, & vendors. IBA has a comprehensive marketing program for its clients that addresses these conflicting needs. This program has successfully found buyers for over 4000 businesses represented by IBA since 1975 in Washington, Oregon, Alaska, California, Arizona, Idaho, and a spectrum of other states across America.
IBA’s first step in marketing a business for sale involves the preparation and assemblage of marketing materials for potential buyers. This process incorporates strategy, knowledge, & experience and is critical to successfully facilitating a sale at the best possible market price in as timely a manner achievable . Ben Franklin once said, ” By failing to prepare, you are preparing to fail”. We recall this quote often at IBA and take the steps necessary to properly prepare our client’s businesses for presentation in the best possible light to buyers, their professional advisers, and the banking community.
This preparatory step is followed by a direct marketing effort to the buyers in our internal database whose acquisition criteria in terms of type of business, industry, price, and geography match the new business on the market.
This initial marketing effort has historically been very fruitful for our clients because the buyers in our internal database are motivated individuals and companies that have proactively contacted IBA to put themselves in position to look at new opportunities as they enter the market . Amazingly, agreement has been reached for the sale to individuals and companies in this database in as short as a week after the company has entered the market, however, no IBA professional will ever promise that we have a buyer for your company or that we can complete a fast sale. No one can predict that information given the many variables that make up a business sale transaction. However, we do know that each year many of our clients are pleasantly surprised at how quickly they are meeting potential buyers and have completed the sale of their business once their business enters the market because of the existence of this database.
The second phase of marketing of an IBA represented business occurs in the public domain. It is our philosophy that a wide advertising net should be established to catch the maximum number of potential buyers for a business while maintaining confidentiality relating to which company is specifically for sale. In accordance with this philosophy, IBA develops a comprehensive marketing strategy for each company we represent based on its location, target buyer market, industry, and the amount of freedom our clients provide us in the use of descriptive language related to their business. This strategy can include Internet websites (e.g., www.bizbuysell.com, www.bizquest.com, www.businessbroker.net, www.axial.net, www.linkedin.com, www.craigslist.com, etc.) and general audience and trade publications. The goal of this program is to generate telephone conversations and face to face meetings where we can make a professional presentation of the company. It is very difficult to sell a business exclusively by email correspondence due to the sophisticated nature of the product. It is also important that all email correspondence be professionally drafted and clearly convey the confidential nature of the information provided.
The first two components of our advertising program are highly effective for our clients; however, we also have three other marketing options with various degrees of risk. The first of these options is a strategic marketing effort. This marketing program involves the direct contact of vertical and horizontal integration acquisition candidates for the business. This type of marketing program can be very effective and generate a competitive environment for the purchase of the business. However, there is risk. The risk is the marketing program can inadvertently cause the confidential nature of the seller’s plans to become known to a competitor, customer, or supplier through their use of deductive reasoning or the process of elimination when contacted by IBA. This information if made public can damage certain types of businesses and it is strongly recommended that a business owner weigh the advantages and disadvantages of this type of marketing effort before authorizing IBA to start that activity.
Another marketing option available to our clients involves the marketing of the business to the wide network of mergers & acquisition firms, business brokerages, venture capital firms, private equity companies, public companies, privately held companies, attorneys, accountants, bankers, consultants, and other members of the business community that interact with IBA on a daily basis. The positive side to this marketing effort is that word will travel regarding the company for sale to a large number of people and companies and increase the possibility of locating a buyer. The negative is that confidentiality will be difficult to maintain and the potential sale of the company may become public knowledge. We recommend that our clients consider the impact of this marketing technique before authorizing us to commence network marketing of their business.
The final marketing option available to our clients are the commercial real estate multiple listing services which our firm participates in as a member office. This is an excellent venue for advertising commercial real estate, businesses that sell commodity products where relationships have a limited impact on revenues (e.g., gas stations, convenience store, franchised restaurants, etc.), companies who operate in niche markets with limited competition, or businesses with limited risk of an employee exodus if the sale becomes public knowledge. However for all other types of businesses there is substantial risk related to the maintenance of confidentiality if this venue is utilized for marketing a company. The reason for this risk is the same reason that this venue is beneficial. A large number of individuals can access information through these services. This venue is always available to our clients; however we recommend that they weigh the advantages and disadvantages of using these services prior to instructing IBA to put their business in the multiple listing services.
The underlying goal of our marketing program is to generate face to face meetings for our professionals with potential buyers. However, the progression from telephone call or email inquiry to an actual meeting is a delicate process that requires an experienced professional who can balance the conflicting goals of providing enough information to create interest while maintaining confidentiality. Achieving results in this challenging environment requires strong communication skills, knowledge, and experience. Superior performance in this environment is one characteristic of IBA representation with our firm having an established track record for identification of actual buyers in a group of inquirers that includes a large number of tire kickers, entrepreneurial dreamers, and confidential information seekers.
Professional business sale negotiations are very similar to athletic competitions. Success is generally achieved by individuals or teams with skill & experience who have prepared properly. IBA professionals understand this reality, so prior to our games, meetings or negotiations with potential buyers; we make great efforts to understand the details relating to the businesses we represent, their market niche, and industry, in addition to having the supporting documentation assembled to support our presentation. This emphasis on preparation has been and continues to be an important characteristic of our transactional success for over 40 years.