Can Competitors Be Good Buyers for Your St. Louis Based Business
Are you a St. Louis, Missouri, business owner considering the sale of your company? If so, you’ve probably put in a considerable amount of research into what it takes to get your business in front of serious buyers. Like many sellers, you may be aware of the strategies that make your establishment attractive to traditional investors, but have you considered your competitors as purchasing candidates?
Although it deviates from standard sales models, the companies that directly compete for your clients could be the key to selling your business quickly and maximizing profits.
Competitors Understand Your Industry
Every industry has specialized strategies and processes that help companies run efficiently. Businesses within the industry often develop their own style of operation based on unique experiences and client demands. There are often a number of these intangibles within a business that offer value but are difficult to put a price on.
An outsider may not fully grasp the impact of your company’s spin on industry standards, which can affect the amount of money they are willing to offer. This leaves you in a position that requires proof of value for your company’s unique practices. When marketing to your competitors, you have the benefit of a pool of buyers that are already familiar with the dynamics within your field. The offers made will often reflect their shared understanding of your company’s position in the market.
Competitors Have More Reasons to Buy
Traditional investors are focused on finding the best deal and look for companies that are priced low with strong opportunities for growth and improvement. So, what can you do if you’re selling a company that is already thriving and don’t want to lower your asking price? Once again, your competitors may be the answer.
Other companies in your niche are motivated by the need to solidify and improve their established position within your shared market. Purchasing your company can help them do this in a variety of ways. If your business has a desirable location, the buyer can use the space as their own once the sale is complete. Your clients can be transferred to their roster, and intellectual property can be added to their resources.
In some cases, once an offer is made, multiple competitors will attempt to outbid each other to prevent the others from pulling ahead in the area. This situation can be advantageous when you’re trying to get top dollar for the company you’ve worked so hard to build.
The Transition Will Be Smoother
Every time a company exchanges hands, there are snags along the way that need to be ironed out. It is often the employees and the clients that bear the impact of working through them. New owners who are unfamiliar with the area or the industry may attempt to change vital business practices because they lack the experience to determine their necessity.
Local competitors already have a grasp on the culture of the area and will often adopt their own established practices or a combination of both, maintaining the integrity of your legacy. Although this still requires some adjustment, the changes made will be decided by industry professionals who have no need to use your company to experiment with industry standards. This means you can feel confident the effect on your employees and clients will be minimized.
Selling your business can require a complex marketing strategy to meet financial goals and timelines. When developing your plan of action, make sure you don’t forget to consider competing companies as viable buyers. Competitors understand your industry, have greater purchasing motivation and are better equipped to care for your employees and clients once a sale is complete.
If you’re ready to list your business and want to find out more about marketing to your competitors, call LINK St. Louis office at (314) 487-0005 or email at infostl@linkbusiness.com to discuss your options with a professional broker today.