When planning an exit strategy for your business, there are several different buyer types to consider. These options come with different pros and cons, so it’s important to find the right buyer for you. This will help ensure you get everything out of the sale of your business that you’re hoping to, be it capital investment, a career change, or a brand new direction for your business.
What is an exit strategy in business?
A business exit strategy is the plan the owner – or owners – of a business put in place to sell their company, or their share in a company. There are different types of buyers a business owner can sell to, depending on what they hope to get out of the sale.
1. Private equity buyers
What is a private equity buyer?
A private equity buyer is a firm that pools the collective money from its investors to purchase private companies. The private equity firm will then overhaul this business to turn a profit, or break the company apart and sell off parts of it.
What businesses do private equity firms purchase?
Private equity firms usually purchase a business when it’s likely the company in question can later be sold again at a higher price. Failing that, the business should continue to make consistent profit and still cover the cost of acquiring it.
Private equity buyers purchase businesses that demonstrate valuable operations and quality management – but, ultimately, their goal is to make a profit. They will nurture the business up to a point, but there is little focus on its long term future beyond the eventual reselling of the business.
Is your business a good fit for private equity buyers?
If you’re seeking private equity interest in your business, key factors to consider include:
- Financials: Ensure your business has sound financials and audited proof of this. Demonstrate your business has potential for future growth.
- Customer base: Expand your customer/client base as much as possible.
- Staffing: Ensure your business is well-staffed and fill any gaps in your team.
- Legacy preservation: Private equity firms often prioritise meeting their financial objectives over preserving the existing culture and strategy of your business.
2. Trade buyers
What is a trade buyer?
Trade buyers are complementary businesses or competitors within the same industry as your company.
What businesses do trade buyers purchase?
Ideally, trade buyers offer to purchase a business because they believe they can offer access to new markets, an expanded customer base, and enhance the skills of the company.
However, if you’re approached by a potential trade buyer, there is a risk that they are just trying to find out pertinent information about your business. Discussions of potentially sensitive information with trade buyers need to be undertaken with caution.
Is your business a good fit for trade buyers?
If you’re interested in trade buyers, key factors to consider include:
- Deal flexibility: You may only be offered a simple deal rather than a more flexible long term plan.
- Operational changes: Your company may need to adapt the way it runs to fit in with a trade buyer’s operations, as they purchase businesses to complement their existing operations.
- Leadership changes: You might need to accept a change in leadership, as trade buyers often prefer to install their own management to help align newly acquired businesses with their operational goals.
3. Goonvean Group
What is Goonvean Group?
Goonvean are a privately owned investment Group that support a diverse investment portfolio, operating across several industries. Every business we acquire is backed by us as a culturally-aligned, long-term investor. When we invest in a business, we invest for the future.
What businesses do Goonvean Group purchase?
With every business we acquire, our goal is to help them achieve their full potential with the help of our resources and investment. By conducting strategic searches, we identify owner-managed businesses we feel will benefit from our investment.
Our operations are divided into four segments that help promote connection throughout Goonvean Group. We encourage collaboration and inclusivity across our businesses, whilst still upholding the individual culture and legacies of the companies we acquire.
Is your business a good fit for Goonvean?
There are many reasons your business might be a great fit for Goonvean Group:
- Business partnership: Looking for a business partner, not just a buyout? When you join Goonvean Group, our experienced board of seasoned business professionals becomes yours.
- Flexible deals: We offer flexible deal structures that give you the option to remain involved, or plan a gradual exit for whenever you’re ready.
- Cultural alignment: Many of our members are family-run businesses spanning generations. As a legacy-minded investment group, we preserve the culture and individuality of every company we acquire, whilst making the transition into the Group as smooth as possible.
- Invested in the future: Unlike private equity firms, we don’t purchase businesses with the intention of selling them on for profit. We invest in businesses we believe we can help thrive, and plan for their future success – not their future sale.
