Business Insights: Understanding Different Types of Buyers, the Buyer to Business Match-up
There are numerous possibilities for the types of buyers to whom a business would be sold. Options are often limited by the nature of the business (ie: the industry, the company’s size, profitability, the number of employees, whether family members are involved in the business, or whether there are co-owners).
Unless you have a partner or family member to whom you intend to transition the business to, most small businesses with valuations below $3,000,000 will be sold to a third-party individual. Others might be sold to employees. Businesses with valuations between $3,000,000 and $5,000,000 have more options as they might be sold to wealthy individuals, larger companies or private equity groups (PEGs). Middle market businesses with a valuation of $5,000,000 or more typically are beyond the reach of wealthy individuals and are acquired by larger businesses for strategic reasons or by PEGs looking for significant returns on their investments.
Here is an interesting article that delves into types of buyers – The 6 Types of Buyers for Your Business