Why buyers buy – Part 1, What does your buyer REALLY want?

You’ve got a great business – it’s obvious why someone would want to buy it, right? Not necessarily.


Unless you are looking at a management buy out, the chances are your buyer isn’t looking at your business the same way you do. In this article, we’ll look at the three main reasons buyers buy.


Reason 1: You’ve got something they need

Businesses looking to grow will often consider acquisitions to acquire a resource such as customers, territory or technology more quickly than they could build it themselves.


These buyers will value your business primarily on a combination of the value of the resource you have that they want and the benefit of the speed of getting it.


Reason 2: They want to take you out

A business might choose to acquire a competitor to reduce competition in the market.


These buyers will value your business primarily on the impact it will have on their ability to compete without you.


Reason 3: They are bargain hunting

Highly cash generative businesses make acquisitions as an investment strategy.


These buyers will be looking for businesses they think they can acquire at an attractive price. Their targets tend to be distressed, run inefficiently or offer opportunities to make synergies.


Finding a buyer means knowing who might buy you and for which reason. In the next part of this series, we will look at how you can attract the attention of each type of buyer.

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