The Trick to Selling Your Business? Think Like a Buyer

Kratos Capital
May 3, 2022

Dallas businesses hoping for successfulmergers and acquisitions need to work with quality investment banking firmsthat know their niche. No matter your sale goals or whom you hire as your M&A firm, though, one constant remains true across sectors and in everysale: you need to think like a buyer. It’s time to break out of your comfortzone, look at your business with discerning eyes, and consider how to make itmore enticing to a typical buyer. Here are five ways to do that.


Understand Your Story

What’s the story of your business? Notethat this should be the story of your company, not you as owner. Leave out thehard work you’ve put in, the emotional connection and struggles, and what’sleft? How has your company thrived and adapted to adversity? What did it to tosurvive the pandemic? A compelling story generates interest, and shows buyersthat your company will be around for the long-term. Without a story, sellingwill be an uphill battle.


Minimize Risk

Owning a business is risky. Buyersunderstand this. This is why they seek to minimize risk to the greatestpossible extent. A business with recurring income, in a thriving niche, withreliable forecasts, and a strong performance history is a low-risk proposition.Anything else may turn buyers off. Work on making your business as low-risk aspossible, and be sure to prominently feature its many attributes in anymarketing materials you develop.


Get all the Paperwork in Order

Ultimately, what you tell buyers matters alot less than what you’re able to demonstrate. Buyers will check every claimyou make, and conduct a thorough due diligence process. This will go a lot moresmoothly if you promptly respond to due diligence requests, and if your paperworksupports your claims about your company. Get this documentation in order beforeyou put your company on the market, so you can enjoy a smooth sale process thatmoves quickly.


Prepare for Negotiations

Deal negotiations require a great deal ofeffort and insight. The right team can help you determine a reasonable saleprice, as well as how various sale terms might affect the ultimate value of thedeal. Working with an M&A firm is critical for effective negotiations thatdon’t distract you from the daily demands of running your company.


Know Your Ideal Buyer

You might not have a specific individualbuyer in mind, but you should have a keen understanding of what type of buyerwould be a good fit for your company. Do you hope to sell to PE and see yourcompany grow into something new and bigger? Would a competitor love to gainaccess to your products and customers? Is your business a great platform oradd-on? Identifying your ideal buyer can help you effectively market to thatbuyer and assess whether the buyers who contact you are serious contenders ormerely window shopping.

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