"You can't sell a secret. Your best buyer may never know your business is for sale.”
Many New Zealand business owners would prefer to keep the fact that they are selling their business quiet. They may not want employees to worry, customers to become concerned, competitors to find out or suppliers to start asking questions.
That's understandable. But there is a potential downside to keeping a business sale too quiet: your best buyer may never know the business is for sale.
If getting the best possible result is important, you generally need to put the opportunity in front of enough potential buyers to create genuine interest. The challenge is doing that while managing what information is disclosed and to whom.
You Can't Sell a Business Nobody Knows Is for Sale
Imagine your business is worth $1 million and there is a buyer somewhere in New Zealand who would happily pay that price.
If that buyer never hears about the opportunity, they cannot make an offer.
This is one of the biggest reasons not to rely on one or two advertisements, telling a few friends or waiting for someone you know to come along.
The wider the relevant buyer pool you reach, the greater your chance of finding the right buyer.
That doesn't mean putting every detail of your business into the public domain. It means making sure the opportunity can be discovered by people who are genuinely looking to buy a business.
Your Buyer May Not Be Who You Expect
Business owners sometimes have a particular buyer in mind before they start selling.
It might be:
- A competitor
- An employee
- A supplier
- A customer
- A family member
- Someone already known to the owner
These can all be potential buyers. But limiting the sale to people you already know can mean missing other opportunities.
The right buyer could be an experienced business owner looking for another acquisition, an investor, an entrepreneur wanting their first business, someone relocating to New Zealand, or a buyer looking for a business in a particular industry or region.
You won't know who your best buyer is until you expose the opportunity to the market.
Think Beyond Your Local Area
New Zealand may be a relatively small country, but business buyers are not always looking in their own suburb or city.
An Auckland buyer may be interested in a business in Hamilton. A Christchurch buyer may be looking for an opportunity in Nelson. Someone in Wellington may be looking for a regional tourism or hospitality business.
There can also be interest from buyers elsewhere in New Zealand and, for some businesses, overseas buyers.
This is particularly relevant to businesses that can be relocated, operated remotely, exported, or expanded nationally or internationally.
Don't assume your buyer is local simply because your business is.
Why One or Two Ads May Not Be Enough
A common mistake is to put a business into one advertising medium, wait for enquiries and assume that if the right buyer is interested they will find it.
They may not.
Potential buyers are spread across different websites, databases, industries, networks and locations. Some may only start looking months after your first advertisement appears.
This is why an effective sale needs sufficient exposure over a reasonable period rather than relying on a single burst of advertising.
The objective isn't simply to generate lots of enquiries. It is to reach enough of the relevant buyer pool to give yourself a genuine choice of potential buyers.
More Exposure Can Mean More Choice
There is an important difference between getting one interested buyer and having several credible buyers interested.
If only one person knows about the opportunity, you have limited choice.
If several suitable buyers are aware of it, you may have more scope to compare:
- Price
- Terms
- Settlement timing
- Buyer capability
- Funding
- Future plans for the business
More buyer interest doesn't guarantee a higher price. However, limited exposure can unnecessarily limit your options.
But What About Confidentiality?
This is where selling a business differs from selling a house or a car.
You may want the market to know that an opportunity exists without wanting everyone to know exactly which business it is.
That is possible.
A business-for-sale advertisement can provide enough information for a potential buyer to decide whether they are interested while withholding sensitive details such as:
- The business name
- Exact location
- Customer information
- Employee details
- Supplier information
- Detailed financial records
- Other commercially sensitive information
More detailed information can then be provided to appropriate prospective buyers as they progress through the process.
The objective is not to hide the opportunity. It is to control the information.
The Simple Way to Think About Marketing a Business for Sale
Think of your potential buyers as a large pool.
If you only tell a handful of people, you are fishing in a very small part of the pool.
If you make the opportunity visible to the wider market, you give yourself a much better chance of finding the buyer who is the best fit.
The simple process is:
- Decide to sell – establish that you are ready to take the business to market.
- Prepare the opportunity – have accurate information available for potential buyers.
- Promote the business – use appropriate business-for-sale channels with high exposure listings to reach the wider buyer market.
- Generate enquiries – allow potential buyers to investigate the opportunity.
- Manage confidentiality – control sensitive information as buyers progress.
- Compare genuine buyers – consider both price and terms.
- Progress the preferred buyer – move into the formal sale process.
This is not about advertising everywhere indiscriminately. It is about making sure the right potential buyers have a reasonable opportunity to discover your business.
Where Should You Market a Business for Sale?
The right combination depends on the type and size of business, but potential channels can include:
- Specialist business-for-sale websites
- Business broker databases
- Industry networks
- Direct approaches to appropriate buyers
- Professional networks
- Relevant online channels
- Existing business contacts, where appropriate
A specialist business-for-sale marketplace can be particularly useful because it puts the opportunity in front of people who are already searching for businesses to buy.
NZBizBuySell, for example, provides a dedicated marketplace for New Zealand businesses for sale and promotes listings to its business buyer audience.
For more detailed information about marketing channels and strategy, see marketing a business for sale.
Don't Wait Until the Business Is Struggling
Another important lesson is timing.
A business is generally easier to present to buyers when it is operating well and the owner still has control over the timing of the sale.
If financial pressure, declining performance or another urgent problem forces the owner to sell quickly, there may be less time to find the right buyer and less flexibility around price and terms.
Marketing a business for sale should ideally begin while you still have choices.
What If You Already Have a Buyer?
If someone has already approached you and you believe they may be the right buyer, it can be tempting to stop marketing immediately.
Sometimes that will be appropriate.
But an early expression of interest is not the same as an unconditional sale. Buyers can change their minds, funding can fall through and negotiations can fail.
Until the transaction is sufficiently secure, maintaining appropriate market interest may help preserve your options.
Get professional advice about your particular circumstances before deciding to withdraw a business from the market.
The Bottom Line: Secrets Don't Sell
Selling a business is usually a once-only opportunity to turn years of work into a financial result.
It makes sense to protect confidentiality, but keeping the opportunity too quiet can work against you.
The goal is not to tell everyone everything.
The goal is to make sure enough of the right buyers know that the business is available, while controlling the information they receive as they move through the process.
Your best buyer could be someone you've never met, living somewhere you've never considered, looking for exactly the type of business you have built.
If they don't know it is for sale, they cannot buy it.
Ready to Put Your Business on the Market?
If you are ready to make your business available to potential buyers, the next step is to create an effective business-for-sale listing.
See how to list a business for sale or
list your NZ business for sale