MICHAEL LANGFORD
Founder/President
Business Sales - Mergers & Acquisitions
Five Business Buyer Types
Business Buyers are generally categorized as belonging to one of the following groups although, in reality, most buyers fit into more than one.
The Individual Business Buyer
This is typically an individual with substantial financial resources, and with the type of background or experience necessary for leading a particular operation. The individual buyer usually seeks a business that is financially healthy, indicating a sound return on the investment of both money and time. Almost all the purchasers of smaller businesses (under $1,000,000) fall into the individual buyer category.
The Strategic Business Buyer
This buyer is almost always a company with a specific goal in mind — entry into new markets, increasing market share, gaining new technology, or eliminating some element of competition.
The Synergistic Business Buyer
The synergistic category of buyer, like the strategic type, is usually a company. Synergy means that the joining of the two companies will produce more, or be worth more, than just the sum of their parts.
The Financial Business Buyer
Most in evidence of all the buyer types, financial buyers are influenced by a demonstrated return on investment, coupled with their ability to get financing on as large a portion of the purchase price as possible.
The Industry Business Buyer
Sometimes known as “the buyer of last resort,” this type is often a competitor or a highly similar operation. This buyer already knows the industry well, and therefore does not want to pay for the expertise and knowledge of the seller.