Once the decision to sell your business in New York (or any where else for that matter), the business owner should be aware of the variety of possible business buyers. Just as small business itself has become more complex, the people interested in buying them have also become more divergent and sophisticated. The following are the current most active types of business buyers: 

Family

Members of the business seller's own family form a traditional category of business buyer.  However, these are tried but not always "true."  The notion of a family member taking over is attractive to many of the parties involved because they see continuity and view this as a prime advantage. This continuity can be a very good thing, given that the family member treats the role as something similar to a hierarchical responsibility. This can mean years of planning and preparation, involving all or many members of the family in deciding who will be the "heir to the throne." If this has been done, the family member may be the best type of buyer. 

Too often, the difficulty with the family buyer category lies in the conflicts that may develop. For example, does the chosen family member have sufficient cash to purchase the business? Can the selling family member really leave the company? In too many cases, these and other conflicts result in serious disruption to the business or to the sales transaction. The result, too often, is an "I-told-you-so" situation, where there are too many opinions, but no one is really ever the wiser. An outside buyer eliminates these often insoluble problems. 

The key to deciding on a family member as a buyer is threefold: ability, family agreement, and financial worthiness. 

Business Competitors 

This is a category often overlooked as a source of prospective purchasers. The obvious concern is that competitors will take advantage of the knowledge that the business is for sale by attempting to lure away customers or clients. However, if the business is compatible, a competitor may be willing to "pay the price" to acquire a ready-made means to expand. A business brokerage professional can be of tremendous assistance in dealing with the competitor. They will use confidentiality agreements and will reveal the name of the business only after contacting the seller and qualifying the competitor. 

The Foreign Buyer

Many foreigners arrive in New York with ample funds and a great desire to share in the American Dream. Many also have difficulty obtaining jobs in their previous professions because of language barriers or licensing. As owners of their own businesses, at least some of these problems can be avoided. 

These buyers work hard and long and usually are very successful small business owners. However, their business acumen is not always on the same level as the seller (as would be the case with any inexperienced owner). Again, a business broker professional knows best how to approach these potential problems. 

It is important to note is that many small business owners in New York think that foreign companies and independent buyers are willing to pay top dollar for their business. In fact, foreign companies are usually interested only in businesses or companies with sales in the millions. 

Synergistic Buyers

These are buyers who feel that acquiring a particular business would compliment their current business and that combining the two would result in lower costs, new customers, and other advantages. Synergistic buyers are likely to pay more than other types of buyers, because they can see the tangible results of the purchase. Again, as with the foreign buyer, synergistic buyers seldom look at the small business, but they may find many mid-sized companies that meet their requirements. 

Financial Buyers

This category of buyer comes with perhaps the longest list of criteria--and demands. These buyers want maximum leverage, but they also are the right category for the seller who wants to continue to manage his company after it is sold. Most financial buyers in New York offer a lower purchase price than other types, but they do often make provision for things that may be more important to the seller than money--such as selection of key employees, location, and other issues. 

For a New York business to be of interest to a financial buyer, the profits must be sufficient not only to support existing management, but also to provide a return to the owner. 

Individual Buyer

When it comes time to sell, most owners of the small to mid-sized business in New York gravitate toward this buyer. Many of these buyers are mature (between 40 and 60) and have been well-seasoned in the corporate marketplace. Owning a business is a dream that many of them can easily afford. The key to approaching this kind of buyer is to find out what it is they are really looking for. 

The buyer who needs to replace a lost job can be an excellent prospect (and we are seeing plenty of this category in New York, New Jersey and Connecticut in the current economy). Although owning a business is more than a job, and the risks involved can frighten this kind of buyer, they do have the "hunger"--and the need. A further advantage is that this category of buyer comes with fewer "strings" and complications than many of the other types. 

A Final Note

The seasoned experts at Inbar Group can help you target the prospects that might buy your business and sort out the "right" buyer to close the deal.  Give us a call at 212-473-5000 to learn more!