In the role of strategic buyers of small businesses there are companies that see in the acquisition the strategic benefits in the form of increased market share, mastering of new markets and technologies, getting the synergies, cost savings. The attention of strategic buyers is focused on the further advantages and information about the results of the activity of acquired companies for past periods are used by them as the basis for making forecasts. The basic criteria that the strategic buyers are guided:
1. The current leadership should remain in the enterprise;
2. The company must occupy a unique niche in the market or be a necessary step in the strategy of the buyer;
3. A reasonable purchase price is usually calculated based on discounted future cash flow.
A lot of business owners jump to conclusions that branch buyers – competitors, suppliers or customers will be the best buyers for them. However, such an original premise can cause serious harm to the sale of the company, as these buyers are not guided by strategic objectives. When determining the price of the buying business, the branch buyers usually focus their attention on existing assets, not wishing to consider the cost of the so-called “goodwill.” Their own considerations do not let recognize the price of excess assets, and a lot of business owners muss them at the beginning with strategic buyers.
Typically, industry buyers are guided by such criteria as:
1. No requirements regarding the minimum volume of sales;
2. The company’s management must shift;
3. Necessary equipment should be in good condition.
In most cases the variant of selling the business by buyers that have already been working in this area should be seen if there are no other suggestions, except for the following cases: 1) if revenue of the company’s is commensurate with money invested in it, and 2) if there are difficulties with transmit to a new owner expertise that he needs for operation of the enterprise, and the company has no infrastructure to continue operating without the participation of its present owner.
As a qualified buyer it can be an investment group (the group of private investors) that has a staff with management talent and has its own funding sources. As well as strategic buyers, investment groups focus their attention on future incomes. They may have established relationships with sources of finance and credit facilities. However, when funding for the purchases involved in personal funds, bargain at the price is less aggressive. Qualified buyers often are the best, since when determining the value, they often consider future income. If you want to attract these buyers, it is necessary to prove documentary the possibilities of further growth and future profitability of the company based presuppositions and hypothesis.
The fourth type of buyer – is the person, guided by financial thoughts. This is usually an individual, but this category may contain qualified buyers, if they had such an opportunity. The attention of these buyers is focused on the present and future advantages are considered as a potential opportunity.
Business is a dream for many people. But nowadays business has become not only a kind of activities and occupation – it has changed into goods. It is often today when someone buys and sells businesses just to earn money on it. Whereas another part of businessmen sells their businesses because of some troubles or inability to conduct it any more. In any case when selling a business it is better to refer to experts who deal with it. And here business for sale site is of much help because there one can learn much details related with this process. Canada residents are welcomed to visit toronto business for sale or vancouver business for sale experts.
And remember that before dealing with any issue it is wise to investigate it. And today it is quite easy to do as online technologies give a nice opportunity to find anything you require.