Targeting the Ideal Buyer: Attracting a High-Value Buyer

When preparing to sell a business, attracting the right buyer can make a substantial difference in the sale outcome. Strategic buyers and financial buyers have different goals and priorities, and knowing which type of buyer to target can help maximize the value of your business.

Strategic vs. Financial Buyers

Strategic buyers are often companies within the same industry, looking to acquire synergies such as new products, services, or access to markets. These buyers may offer more for businesses that fit well with their existing operations. In contrast, financial buyers—such as private equity firms—are primarily focused on return on investment, and they primarily assess businesses based on cash flow and profitability. A third category of family offices and high net worth individuals may acquire companies for cash flow and diversification purposes. 

Increasingly, we’re seeing the rise of private-equity backed portfolio companies making strategic investments or “add-on” acquisitions to their primary platform. These are hybrid approaches that can give some strategic benefit with a focus on profitability. 

Understanding the motivations of each type of buyer will help you position your business in a way that appeals to their specific interests. Strategic buyers are often willing to pay more for the long-term benefits, while financial buyers may be looking for an opportunity to increase profitability in the shorter term. 

Preparing for a High-Value Buyer

To attract a high-value buyer, your business should be presented as scalable, with strong growth potential and a stable management structure in place. Demonstrating consistent revenue growth, well-documented processes, and an ability to operate independently of the current owner can make your business more appealing to buyers.

Buyers are likely to pay a premium for businesses that show the potential for expansion without requiring significant operational overhauls. A business that’s prepared for smooth integration, with low risk and high potential, will attract the best offers.

For more information on targeting high-value buyers, explore Finding the Right Buyer for Your Business.