Business Buyer Personas: Exploring the Different Types of Potential Buyers for Your Business

Business Buyer Personas: Exploring the Different Types of Potential Buyers for Your Business

Business Buyer Personas: Different Types of Potential Business Buyers There are many reasons why people seek to buy businesses. In this article, we outline the three main types of buyers that prospective sellers are likely to encounter: Individual Buyers, Strategic Buyers and Financial Buyers. Since each of these buyer types comes with their own unique interests and behaviors, understanding their personas and motives can help you maximize the value of your business.

Individual Buyers

An individual buyer is an entrepreneur like yourself who is motivated by a desire to run his or her own business. Often, individual buyers are first-time business owners who may have management experience in a corporate environment. Many individual buyers are interested in working as owner-operators, so this type of buyer will probably have a personal interest in your product or service and will very likely continue to run your business in much the same form. This type of business buyer places a high value on infrastructure, such as a good team of employees and owner training, because these assets make for an easy and effective transition of ownership. In order to maximize the value of your business, it is important to strengthen and emphasize these aspects of your business in marketing materials and discussions with individual buyers. First-time business owners new to your industry may also appreciate some education and assurance about the positive qualities of your industry. Because this type of buyer may not have the purchasing power of financial and strategic buyers, offering some type of owner financing may make your business more attractive to them.

Strategic Buyers

Unlike individual buyers, strategic buyers are usually experienced business owners or companies that already operate a similar or related business in your particular industry. This type of buyer is motivated to purchase your business as a means of expanding their current business into new markets, decreasing competition, or acquiring a unique product or service that benefits their business. Accordingly, strategic buyers will often transform the business in some way as it becomes integrated with their own. Typically, this type of buyer is not primarily motivated by your business's financial performance. Additionally, other aspects of your business, such as brand identity and a team of employees, are less important when targeting strategic buyers. Since strategic buyers generally have access to capital and are interested in more than just the intrinsic value of your business, they may be willing to pay an unusually high price for your business. In order to market to this type of buyer, you should emphasize a valuable product or service and consider how your business's offerings can fit into related companies.

Financial Buyers

Unlike strategic and individual buyers, financial buyers are not necessarily involved with or interested in your particular industry or product. Rather, a financial buyer is usually a financial firm, such as a hedge fund or private equity firm, or a high-net worth individual that approaches your business mainly as a financial investment that will ultimately provide a positive financial return. Since financial buyers are primarily concerned with the return they will get in purchasing your business as an investment, it is good to show strong earnings and potential for growth. Although it is always necessary to have accurate financial statements in any business sale, these aspects will be especially important materials to an experienced financial buyer. Understanding the main types of business buyers allows you to market your business for sale through advertising and discussions with different types of buyers. This can be a challenge for business owners who may be experienced entrepreneurs but unfamiliar with business sales. For this reason, working with a business advertiser to position your sale with the right type of buyer is critical to your success. Business advisors like Transworld have immense experience with all of these buyer types, and they can support you throughout the selling process in order to get the best sale price for your business.