When preparing your business for sale, identifying potential buyers is one of the most critical steps in the process. The ideal buyer will depend on the unique fundamentals of your business, as different buyers are drawn to distinct opportunities. For instance, a private equity (PE) fund may prioritise businesses with maintainable earnings and scalable growth potential. In contrast, a corporate buyer might focus on synergies, such as cost savings or market expansion, gained from acquiring a competitor.
Understanding who your likely buyers are — and tailoring your sales approach to them — will allow you to present your business in the best light while avoiding wasted time pursuing buyers who are unlikely to engage.
The Three Key Buyer Groups
While no two buyers are the same, prospective buyers typically fall into one of three categories:
1. Venture Capital/Private Equity
These investment groups specialise in acquiring and growing businesses. Their interest often lies in the financial performance of a business, particularly its revenue stability, profitability, and potential for scaling. PE buyers are experienced and sophisticated, so preparing clear, robust financial information is essential when targeting this group.
2. Corporate Buyers
Corporate buyers are often businesses operating within the same industry (or a related one), seeking to strengthen their position through strategic acquisitions. This group could include competitors, businesses in adjacent supply chains, or organisations seeking diversification. For corporate buyers, synergies such as operational efficiencies, expanded market share, or complementary product lines can significantly influence their interest.
3. Private Buyers (e.g., “Mums and Dads”)
Private buyers are typically individuals looking to own and operate their own business. These buyers often value the lifestyle or independence that owning a business can offer. While they may lack the financial resources of PE funds or corporates, their focus on day-to-day operational involvement can make them a good fit for smaller businesses or those with less complexity.
Balancing Buyer Interests and Risks
Each buyer group comes with its own risk profile, funding preferences, and sector focus. It’s unlikely that a sales process will cater exclusively to one type of buyer, so a balanced and strategic approach is critical.
Finding the right buyer isn’t always straightforward, as interest can fluctuate, especially among financial buyers. At Moore, our experience lies in identifying the buyer profiles that align best with your business and ensuring the process is as efficient as possible. We know that most business owners prefer a private and discreet sale process, which is why we focus on targeting a select group of qualified buyers.
Protecting Sensitive Information
One of the most significant concerns for business owners during a sale is protecting sensitive information. This is especially true when negotiating with competitors, who may also be among the most logical buyers for your business.
While it’s natural to be cautious, excluding competitors entirely from the process can reduce the pool of potential buyers and the overall value of the sale. We work closely with our clients to manage this balance. For example, competitors can be approached later in the process, when a strong bid has been received. Alternatively, the level of information disclosed to competitors can be limited initially and expanded as negotiations progress.
The Role of Sell-Side Advice
Navigating the sale of a business is complex, but experienced sell-side advisors can make the journey smoother and more successful. By understanding your goals and the nuances of your business, we can help identify the right buyers, manage risks, and structure a sale process that protects your interests.
How can Moore Australia help
At Moore, we’re committed to helping you thrive in a changing world. Whether you’re preparing for your next chapter or simply exploring your options, our goal is to ensure you have the insight and guidance to maximise the value of your business.
If you’d like to discuss how to prepare your business for sale, or if you’re looking for advice tailored to your unique situation, get in touch with us today.