Here’s why your competition could be your best bet for buying your business.

When you’re ready to move on to your next business venture, you may decide that selling your business is the best option. If you don’t have someone hand-picked to take over, you might worry about who’s going to be interested in buying your business. One option is to seek out a highly experienced business broker, who will have access to a large pool of potential buyers. Another common option is selling your business to a competitor within your industry. Though it may seem strange initially, it can make a great deal of financial sense.

Here’s a look at why a business owner would sell to a competitor and what questions need to be asked during the process.

A Motivated Buyer

A business sale to a competitor tends to give you the benefit of a very motivated buyer. In most cases, competitors are willing to pay a premium for a business that they know is already successful. They also know the value of ensuring that they make the purchase before anyone else can do so, as buying a competing business both increases the value of the buyer and eliminates competition at the same time. Simply put, it makes sense for your competitors to want to buy your business when you are ready to sell.

An Easier Sale

In many cases, the choice to sell your business to a competitor is also an incredibly easy sale. It’s fairly easy to check the references of someone who is already running a successful business, and getting funding is usually simple when he or she is already in the same field. It’s also easier for you to get an idea of how your business would be run after you leave, which might make you more comfortable with the idea of selling. If you want an easy sale, working with one of your competitors might be the best way to go.

Asking the Right Questions

A business sale to a competitor isn’t as open and shut a case as it may seem, though. There are plenty of things you’ll need to figure out, especially if you care about the future of your business. Learning to ask the right questions is a good way to determine if the deal makes sense.

Consider your relationship with the competitor. Will you be happy to know that he or she now owns your old business? How  might this sale impact your employees? There’s a chance that some of them might be made redundant if the businesses merge. The more concerned you are about what happens when you leave, the more careful the scrutiny under which this sale should fall.

Selling your business to the competition can make a lot of sense on paper. It’s usually an easy sale to a motivated buyer, which will certainly make your life easier. You do need to make sure that you are comfortable with the idea of selling to the competition and that you know what impact this will have on the future of your business before you sell, though. Doing so will make it easier for you to feel comfortable with the future of the business you’ve built.

Our team at Alliant is here to help you identify the priorities of your sale and guide the process of negotiations, even if selling to a trusted employee.  Let us handle these negotiations for you based on your goals and objectives and a business valuation.

If you’re considering selling your business in the coming months, contact us today to talk to an expert and discover we can help keep the process streamlined and simple.

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What We Do

Determine Price
Find Buyers
Qualify buyers
Negotiate
Close

Determine selling price
Market sale confidentially
Screen & qualify buyers
Create positive negotiation environment
Manage due diligence
Orchestrate closing

Determine selling price.............................................(at no cost)
Market sale confidentially........................................(at no cost)
Screen & qualify buyers.............................................(at no cost)
Create positive negotiation environment........(at no cost)
Manage due diligence...............................................(at no cost)
Orchestrate closing.....................................................(at no cost)
Attend closing...................(where we earn our success fee)

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