Who Are the Potential Buyers?
Potential buyers for your business can come from anywhere and any place—any were in Australia or Overseas, your customers, suppliers, and your community or industry competition. Buyers who are known or unknown to you and who may be unearthed by your advertisement can usually be divided into three groups: Normal Buyers, financial buyers and strategic buyers.

Normal buyers: In most cases they are Tradespersons, Mr. Average Or Mrs. Average who through redundancy, desire for change (either life style or town location) or the lack of a suitable job consider the purchase of a business is their best option. In other cases they are corporate refugees — former executives of larger corporations who want to buy themselves a job by finding a company to actively manage.

The possible reasons for the purchaser, buying your business is:

A source of income

Independence

Income for other members of the family

A way of increasing assets

Personal interest and Growth (passion & need for a challenge)

Tax advantages

A way of combining home and income

The opportunity to work with one’s partner

Financial buyers: These types of buyers are primarily interested in your business’s cash flow. They are typically individuals or companies with money to invest, and are willing to look at many different types of businesses or industries. In most cases they are companies that are simply looking for good returns on their investments, and who would like your current management to stay in place.

Financial buyers will scrutinize your financial statements and your assets very closely. Most are looking for a solid, well-managed company that won't need a great deal of immediate change, but there are some investors who specialize in turnaround situations and will be willing to look at companies that are not currently profitable.

Strategic buyers: Strategic buyers are those who are interested in your company's fit into their own long-range business plans. They may be one of your competitors, or a similar company from another region that wants to expand into your local area. The classic strategic buyer would be a larger company who does what you do in a nearby region. However, another possibility is a company in a related business, whose management can see that your company has strengths from which they can benefit — for example, you may already produce a product that they want to sell, or you may have distribution channels that they want to exploit.

Whether synergistic or competitive, strategic buyers are generally the ones who will pay you the most for your business. The better the fit, the more they will want your business and the greater the premium they will pay.

You must be careful in speaking with competitors or people your business currently deals with directly as suppliers or customers. Although they may be legitimately interested in buying your business, if the deal falls through, you don't want them to have gained enough information to ruin you

It's best when dealing with all potential buyers to have them sign confidentiality agreements to protect your legal rights, but don't rely solely on the paper — you need to keep your sensitive information like your customer list under lock and key until the final sales contract are signed.
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