Ten ways to find a buyer for your business without using a broker

Finding buyers for businesses can be done via several means, and needn’t cost you lost of money, or anything at all.

The deals that I have been involved with have been originated by different methods and there isn’t one single right or wrong way. Certain methods may be preferable depending upon business’ size or sector, but at the end of the day if a deal can be done then who cares how it came about?

I don’t intend this article to be about bashing brokers. There are some very good brokers out there who have achieved excellent results for their clients. I’ve been involved in a couple of deals involving brokers who enabled a smooth transaction, but I have also had interactions with brokers, especially on the sales side, who have either made the process too complex and prevented a deal being agreed or made their money on the listing fee and then had no real interest in facilitating a deal being done.

If you don’t want to use a broker, below are 10 suggestions which may help you to find a buyer without using a broker or incurring upfront fees:

LinkedIn – with over 800 million users, the chances are that someone interested in buying your business will be a LinkedIn user. I actively market myself as a business buyer on LinkedIn and receive messages from business owners looking to sell so can attest to the fact that it is an effective method of attracting a buyer.

Your personal network – do you know someone who might know someone who might be interested in buying your business?

Social media – There are groups on Facebook for business buyers and sellers. With such a massive reach, using social media can be a very effective way of marketing your business for sale.

Competitors – They may have been a thorn in your side in the past but acquiring your business could be a massive opportunity for one of your competitors to grow quickly or increase their margins.

Suppliers – A supplier may fear losing a large chunk of their turnover if you sold your business to a third party or could see buying a customer as a strategic move, so could be interested an acquisition.

Customers – Could a customer increase their profitability or make life difficult for their competitors if they acquired your business? Or are they highly reliant upon your supply that the sale of your business represents a significant risk to them. Either way, customers could be potential buyers of your business.

Professional advisors – Accountants, lawyers, IFAs are well connected to business owners, investors and high net worth individuals. A deal that I am working on at the moment was introduced by my IFA as one of their other clients was looking to retire and sell their business and put us in touch.

Staff – Would your staff be interested in doing a management buyout (MBO)? MBOs are a great way of selling the business because if the staff are currently running the business, the risk of the business’ performance declining when the owner leaves is reduced. MBOs are a proven way of acquiring a business and are understood by lenders.

Own marketing - I have known business owners compile a list of potential acquirers and run a marketing exercise aimed at these to find a buyer. For example, one of my contacts wrote over 100 letters to potential targets and one of these expressed an interest and ended up buying his business.

Corporate finance – So instead of using a broker, a corporate finance company or an accountancy firm with a corporate finance team will run a sales process for your business. Typically, this would work for larger deals, but it is usual that they would run these processes for no up-front fee but take a percentage of the total sale value once the deal has completed. Buyers tend to prefer dealing with corporate financiers as opposed to brokers as they need to broker a deal to get paid, so can be more communicative and easier to deal with.

Hopefully one of the 10 suggestions would work for your business. Alternatively, the same strategies are also useful for business buyers looking to source deals.

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