Rating Today’s Business Buyers
Business owners seldom get to do a thorough analysis of all potential buyers of their companies, but the truth is that there are simple tools allowing sellers to scrape the surface of buyers and categorise them efficiently. This can later help with aligning expectations and foreseeing potential problems. Let’s take a look at six most frequent categories of business buyers.
A family member as a buyer can be seen as highly advantageous – the business gets to stay in the family and the vision lives on. If all family members are involved in selecting the next heir to their throne and continuity is regarded as a hierarchical responsibility, it can not only be done right but also represent the best type of buyer. However, the suggested heir is strongly advised to rank high in the following three areas – ability, family agreement and financial worthiness.
Another prospective buyer of a business can be its competitor. Even though it may sound scary, a competitor who is ready to pay the right price is an excellent continuator of the selling business. It is needless to say that caution must be taken in order to avoid leaking information into the wrong hands. Business brokers can be of a tremendous assistance in this regards as they use confidentiality agreements and will reveal the name of the business only after contacting the seller and qualifying the competitor.
The Foreign Buyer
It is not uncommon for Thai businesses to be taken over by foreigners. Many foreigners may have difficulty obtaining jobs in their desired fields or simply have strong enough vision and want to pursue their dreams. Owning a business will also help eliminate the pain of acquiring a work permit. A potential problem with this type of buyers is that their business acumen doesn’t necessarily coincide with that of the seller and a professional third party intermediary can come in extremely handy in resolving the situation.
Synergistic buyers are buyers wanting to purchase a business in order to merge it with their existing ones. Such combination would lower the costs, bring new customers and other advantages. Since this type of buyers has a long-term vision behind the acquisition, it often doesn’t mind to pay more than other buyers. The only downside is that they might be more interested in purchasing medium to big business, and not small companies.
Sellers selling their business to financial buyers will often find themselves being able to manage it after it was sold. For this reason, financial buyers may offer less money for the business, but in return offer the inclusion of a seller in the decision-making about a variety of issues, such as selecting the employees, location and others. Nevertheless, in order to be attractive for this type of buyer, a company must be providing its owner a considerable return.
Individual buyers are frequently considered the most favourite type of buyers amongst sellers of small to mid-sized businesses. Why? Individual buyers are usually mature men/women in their 40ies to 60ies and have bags of experience. Moreover, owning a business is a dream for them and they have the necessary funds. An even better prospect for purchasing a business is an individual buyer looking to replace their job. Their main advantage is usually fewer attached strings and a hunger for “making things happen.”