Why selling to strategic buyers is an optimum strategy

By Kempten Schwab
October 22nd, 2020

Organizations are driven by creativity, innovation, and expertise, which means they provide value that far exceeds the cost of their products and services. A strategic buyer is by nature, not restricted by the same constraints of financial buyers. They seek integrated ways in which those organizations could fit within their existing operations and make acquisitions based on what’s best for their long-term stakeholder value.

In my experience, I’ve found that sometimes a strategic buyer isn’t expecting to make an acquisition until we bring the right opportunity before them. We do this by putting together a business plan — a creative concept — that a strategic buyer might not have otherwise considered, and we show them what they could achieve by acquiring our client. It’s about creating that “aha moment” for the strategic buyer and getting them excited about the possibilities. When you understand the integrated value of your organization — or what your business is actually worth to someone else — you realize it’s far more beneficial to work with an expert like STS to guide you through the creative exit process.

STS can help maximize the value of your business by finding the right strategic buyer, instead of someone who is just going to look at your profit and loss statements and acquire your company for purely financial reasons. We help the buyer understand the DNA of an organization — its true core competencies and strategic value — and then help highlight that in the sale, creating a positive outcome for both parties.

For any entrepreneurial business owners that are looking to sell to a strategic buyer, here are my top 3 things to remember.

  1. Humble yourself and be prepared for someone to look at your company in a totally different light positive or negative. This is what I like to call shifting the lens.
  2. Check emotions at the door. Remember, it’s not personal, it’s just business.
  3. Set your preferred and required outcomes. What are the key components of the transaction for the exiting owners before transitioning? These go beyond the financial components. If you know you can meet and exceed these goals, it’s probably a great decision to commit to the transaction.

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