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M&A Basics | Fishing vs. Hunting for Buyers of Your Company

Which approach is the right tool to sell your company: a fishing rod or a rifle?

Using a fishing rod involves casting a line, baiting it, and patiently waiting for a bite. In the realm of business sales, the “fishing rod” strategy involves discreetly marketing your company for sale across various platforms like online media, trade publications, and newspapers. It’s a passive approach, much like a fisherman patiently awaiting a fish to take the bait.

On the flip side, selling a business with a rifle demands precision. It means identifying your target, tracking them down, engaging them directly, and hitting the bullseye. This method is active and immersive, albeit more resource-intensive in terms of time and cost. It calls for careful planning, precision, discipline, and, above all, confidentiality.

In some cases, a combination of both strategies can work. However, it’s worth noting that smaller businesses, with annual revenues below $10 million, are typically acquired by individuals (about 95% to 99% of the time) and are less likely to be purchased by companies. Hence, the “fishing” approach suits these scenarios. Conversely, mid-sized businesses often attract corporate buyers and private equity firms, making the “hunting” approach more suitable.

The next step is determining the most efficient means of reaching your target market. Do you directly approach them, or is it more effective to advertise your business in targeted media channels that cater to those actively seeking acquisitions?

In this article, we guide you through identifying the most likely buyers for your business and crafting a marketing strategy to effectively reach them.

Are you ready? Let’s embark on this journey, whether it’s hunting, fishing, or a blend of both, to secure the best deal for your business.

What’s the Most Efficient Method for Contacting Buyers?

Small Businesses: Since small businesses typically attract individual buyers, the smartest and most economical way to connect with these potential purchasers is through targeted media channels. These are platforms where individuals have already expressed interest in buying businesses – think of it as “fishing.” In essence, this pool of prospective buyers has already been gathered for you, streamlining the process and optimizing cost-effectiveness.

Mid-Sized Businesses: In contrast, the most effective strategy for selling a mid-sized business, one that often garners attention from corporations and private equity firms, is a dynamic combination of proactive outreach and strategic marketing, akin to a mix of “hunting” and “fishing.”

When to Fish for Buyers

For small businesses, the most efficient and budget-friendly approach to selling is through discreetly showcasing the business on dedicated business-for-sale platforms. When it comes to attracting buyers, think of it as “fishing” – these specialized portals and targeted media channels serve as your most effective tools.

When it comes to individuals, cost-effective targeting is primarily achieved through advertisements. Directly approaching or “hunting” individuals to buy your business isn’t a practical or realistic strategy.

When to Hunt for Buyers

Hunting for buyers is a practical strategy when selling a business that’s likely to be acquired by a company.

When adopting this approach, it’s crucial to focus your efforts on targets that are fully prepared, willing, and financially capable of taking action. Researching the company’s acquisition history is key. The more acquisitions a company has recently completed, the higher the likelihood it will consider another purchase.

In general, smaller companies, with annual revenues below $10 million, are not typically equipped or inclined to invest hundreds of thousands or millions of dollars in acquiring competitors. While exceptions exist, mid-sized and larger companies are the ones typically engaged in growth through acquisitions.

Is company size a critical factor in hunting?

It’s essential to exercise caution when smaller companies, with revenues less than $10 million annually, express interest in acquiring your business. Contrary to common belief, smaller companies seldom engage in acquiring other firms. Why? Because they are often consumed by addressing immediate issues and pursuing new major clients, leaving them with limited resources and bandwidth to develop and execute acquisition strategies proactively.

Smaller companies primarily favor organic growth, gradually increasing marketing and advertising budgets. Many operate in a somewhat chaotic manner, constantly pursuing the next significant deal or customer. They typically lack the substantial cash reserves necessary for acquisition-driven expansion. Attempting to sell your business to smaller companies can prove ineffective and consume valuable time.

When it comes to larger companies, size indeed holds a significant role in the equation.

The primary yardstick these larger enterprises employ to assess the feasibility of an acquisition is EBITDA, with a minimum threshold usually set at $1 million.

Why, you may ask? The rationale is quite straightforward — the investment of time and the professional fees involved remain relatively constant whether you’re dealing with a $1 million transaction or one worth $25 million. In fact, the fees for larger deals, while slightly higher, exhibit a diminishing percentage in relation to the transaction size.

For instance, a $1 million deal may incur fees and expenses of $50,000 or even more (equating to around 5% of the deal’s size), while a $25 million transaction might involve fees ranging from $150,000 to $300,000 (translating to 0.6% to 1.2%). This demonstrates that, in terms of cost-effectiveness, pursuing larger deals is the wiser choice.

To put it into perspective, a company would need to invest in 25 businesses, each with an annual cash flow of at least $1 million, to achieve the same impact as acquiring a single company with an annual cash flow of $25 million. Consequently, opting for larger acquisitions proves to be more efficient, not only in terms of cost but also in time management.


When it comes to selling your business, the first step is identifying the type of buyer best suited for your venture.

If your ideal buyer is an individual, then employing a “fishing” strategy proves to be the most effective approach for selling your business.

On the other hand, if your target buyer is a company, then the “hunting” strategy becomes the prime choice for a successful business sale.

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