Selling a Business

5. Marketing the Business

Marketing your business falls into six stages.

5.1 Find potential buyers, such as:

• Competitors, suppliers or customers.
• New market entrants, including foreign companies.
• Your own management (a buyout) or another management team (a buyin).
• Financial investment companies.

5.2 List possible buyers.

• This should involve no more than 30 names, divided into an A and a B list. Only use the B list if the A list does not produce results.

5.3 Approach the possible buyers to see if they are interested.

• Keep your own business anonymous by using an adviser.
• It is normal to approach a business through its adviser (eg the auditor), unless you have a better contact. The adviser can direct you to the appropriate person. If the business is run by an owner-manager, approach the individual directly.
• Use the phone, or a one-page letter.

5.4 Ask your legal adviser to draw up a short confidentiality agreement for interested buyers to sign before any discussions commence.

5.5 Send out the Sales Memorandum with:

• An outline of the sale timetable.
• Details of where and when you would like to meet buyers.
• A request for opening offers.

5.6 After receiving offers, draw up a shortlist of buyers.

• Reject buyers without the finance to make the purchase.