Buyer Motivation
Understanding the buyer's perspective is important as you prepare your business for sale. Acquisitions can accomplish a variety of business goals for the buyer depending on whether they are a strategic buyer or a financial buyer.
Strategic buyer goals
- Diversify into new products/services/markets
- Technology/skill sets/resources
- Management leverage
- Reduce competitors
Financial buyer goals
- Efficiency - reduce costs, gain economies of scale
- Growth - revenue, margin, profit
- Accretion of earnings
- Return on investment
- Tax benefits
The most effective buyers will have rational business objectives, an acquisition plan, management depth to execute after an acquisition, a professional team to manage the process, adequate financing and the stakeholder support in their own organization to make an acquisition successful after the deal closes.
Ask about these aspects of a buyer's acquisition strategy to better understand why your business is a good target for their consideration. This will be important when you position your business for the highest value as it relates to the buyer's goals.