Finding a buyer for your business
- Gé Sletterink
- How to
- 17 May 2023
- Edited 13 Apr 2022
- 2 min
- Selling and takeovers
You can only sell your business if you actually have a buyer. Sometimes someone will contact you directly. In other cases, you will have to find a buyer yourself. You should decide to what type of buyer you intend to transfer the business.
The person who ends up buying your business is usually not the buyer you have in mind. This means you will need to be proactive and start looking. Put some feelers out by asking people in your network. Or ask your accountant or advisor to do this on your behalf . Business transfer consultants often have a database containing potential buyers. You can also search online (in Dutch) to find an appropriate buyer, or post a sales advert there yourself (you can do this anonymously if you like). Make yourself a list of potential buyers of your business and use a buyer profile.
Types of buyers
To what type of buyer are you looking to transfer your business? Your choice can depend on your relationship with the buyer, business continuity, or the highest possible sales proceeds.
Buyers who are family members
It might seem like a natural step to transfer your business to your children or another family member. In this case, there is already a link with the business. But you need to ask the question: does the family member have what it takes to take on the business? Transfer within the family generally does not generate the highest price. The purchase price is often converted into a ‘soft’ loan. You should also consider the interests of other family members in your decision.
Buyers from within the business (MBO)
Acquisition by your own employees, a co-business owner, or a shareholder is referred to as a management buy-out (MBO). The buyer is intimately familiar with the business, while you have a good knowledge of the buyer’s personal qualities.
Buyers from outside the business (MBI)
A management buy-in (MBI) involves transferring the business to someone who is not employed by the business. For example, a manager with ambitions to become a business owner, or a new business owner (in Dutch). An MBI may be completed in stages, where the buyer gradually takes over parts of your business.
The strategic buyer is a fellow entrepreneur. He takes over your company to expand his own activities, purchase advantage, extra turnover, or buy a colleague out of the market. In this case, your business will be integrated into a larger company. Strategic buyers tend to offer a higher price than other types of buyers and will pay the purchase price as a lump sum.
A buyer must fit your company. You want to click with them. But above all, the buyer must have the qualities required to lead the company. And, of course, be able to pay the selling price.
To get the right feeling, first contact interested buyers with basic information (that is, profile sketches) about your business. You should preferably do this through an intermediary. Candidates who are still interested after studying the profile sketch and the check with the buyer profile, you provide the extensive memorandum of sale or oral information. Before you give the sales memorandum, have the prospective buyer sign a nondisclosure agreement (NDA) (in Dutch). This prevents sensitive information from leaking out.
What happens next
Once you have found a serious candidate, you should complete step 4 of the sales process: from contact to contract. The first step is conducting negotiations (in Dutch).