Marketing a Small Business for Sale
If you’re in the vicinity of Google, take a moment to search for “businesses for sale.” Instantaneously, you’ll find a multitude of web portals catering exclusively to those seeking opportunities in the realm of small and mid-sized businesses.
If your business is on the market and not yet featured among the listings on the portals most relevant to your offering, it’s time to change that. These platforms stand as the paramount method to effectively market smaller enterprises for sale. Notably, they’re not only frequented by potential buyers but also draw the attention of your competitors and private equity firms, thereby attracting a pool of qualified medium-sized business buyers.
The ease and efficiency with which you can reach potential buyers today are unparalleled. However, the true distinction lies in how you complement your listing. This determines whether you capture the interest of genuinely interested buyers or simply fade into the background.
In the forthcoming article, we’ll guide you through the art of crafting an effective ad and provide insights on the essential information to incorporate into your post. This counsel is rooted in our extensive experience with these powerful marketing tools, ensuring your journey towards a successful sale.
Why Buyers are Now More Selective and Educated
Online platforms for selling businesses have a dual impact. They simplify the selling process for business owners, yet concurrently broaden horizons for potential buyers. This increased scope of options and information has naturally led to a rise in discernment and knowledge among buyers.
Create an Effective Ad Copy
Utilize discreet language
For optimal confidentiality in marketing your business for sale, employ nondescript language. Crafting intentionally ambiguous ad copy involves presenting your business in broad strokes, avoiding revealing specifics about its identity. This approach offers enough detail to pique interest while preventing anyone from pinpointing the business.
How can you enhance your copy’s effectiveness?
Strive for maximum intrigue and engagement. Crafting an impactful ad demands effort, but the time invested will be worthwhile.
If you’ve opted for business-for-sale portals to market your business, the essence of captivating and compelling ad copy can’t be overstated. A potent ad is succinct, direct, and ignites curiosity among potential buyers.
Average Number of Inquiries
What volume of inquiries can I anticipate?
Typically, our businesses witness around three to five substantial inquiries every month. The most impactful ads garner an impressive count of 10 to 20 monthly responses. Even a slower ad can yield one to two monthly interactions. It’s worth remembering that a single buyer is all it takes to successfully sell your business.
While crafting compelling ad copy holds significance, the inherent appeal of the business profoundly influences the number of responses you can expect to receive.
Variables that Make the Biggest Difference
A marketing strategy holds the power to finely adjust various variables, leading to a significant shift in the volume and nature of interested buyers.
Among these variables, the initial quartet — profit, asking price, location, title — stand as the sole criteria visible to viewers on the ad’s preview page across most portals. Without their presence, your ad might go unnoticed, making it paramount to meticulously optimize these details as a foremost priority.
Annual Cash Flow (SDE)
Increased cash flow equals heightened responses. Cash flow is of utmost importance to potential buyers. Above any other considerations, it’s the decisive factor dictating your response rate. Our findings indicate that businesses with lower cash flow multiples attract up to 10 times the responses compared to those with higher multiples.
Asking Price
- The portals mandate a precise listing price, eliminating the possibility of indicating a range.
- Distinct price points correspond to varying levels of buyer experience and knowledge.
- A higher price signifies a well-established, larger business, typically attracting more seasoned buyers.
- Conversely, when dealing with businesses at lower price points, anticipate interactions with a less sophisticated buyer pool.
The asking price wields considerable influence on response rates, driven by the principle of supply and demand. Lower price ranges host a greater abundance of businesses for sale compared to their higher counterparts. Moreover, there exists a larger pool of buyers with $1,000,000 cash available than those with $10 million.
Seasoned buyers are inclined to engage in extensive research before finalizing a business purchase. A sophisticated buyer might evaluate over 100 to 300-plus companies for each acquisition they undertake. For instance, a buyer targeting a $500,000 business might explore 20 other available options, while someone eyeing a $10 million enterprise could meticulously review and contact well over a hundred potential ventures.
Businesses priced below $1,000,000 naturally attract a significant number of financially capable buyers. In the realm of businesses priced above $5,000,000, the ascent in price corresponds to an increase in the financial acumen and sophistication of potential buyers.
Ad Title
The ad title holds paramount importance. Your ad’s title should seize the attention of potential buyers and draw them in. Our recommendation is to fine-tune and refresh the ad title every 30 to 90 days.
A revised ad title has the potential to double or even triple response rates. Introducing a new or distinct ad title positions your business as a fresh listing on the portals. A modified title might spark interest from a buyer who previously glanced over it.
For certain businesses, a straightforward title proves most effective. Conversely, unique or specialized businesses might benefit from a captivating title.
A potent title can amplify responses by an impressive 100% to 500%. Opt for an enticing yet informative ad title. The aim is to captivate the interest of qualified buyers. While the title should remain truthful, its primary function is to encourage these potential buyers to explore your ad. Delve into the distinctive facets of your business and incorporate them into the title. This might entail some contemplation, but every business possesses distinct qualities worthy of mention.
Here are a few successful ad titles we’ve employed in the past:
- Profitable B2B Marketing Company with a 90% Repeat Client Base
- High-Margin Service Company Cultivating Loyal Customers
- Lucrative Coupon Business with Ongoing Revenue
- Thriving Niche B2B Service with a 70% Repeat Client Rate
- Rapidly Expanding Home-Care Enterprise
- Coastal Lifestyle Business Opportunity
- Exceptionally Profitable Non-Medical Home Care Venture
- High-Growth Niche Metallizing Company Making Waves
- Established B2B Service Business with Over Half a Century of Excellence
Ad Copy
On most web portals, only a brief excerpt of the ad copy, often two to three lines, is visible prior to clicking for full details. Given this limited space, if you have a story to share, distill it into concise wording.
Passion + intrigue + excitement = amplified buyer engagement. Infuse your business description with genuine enthusiasm. Move beyond mundane features and spotlight the captivating advantages and unique facets of your business. Craft an exciting narrative, showcasing compelling elements like location or the distinctive attributes of your products and services.
Your ad should provide a succinct overview of your business and why it stands as an appealing investment. Adopt the perspective of the buyer – what would seize your attention? What sets your business apart and captivates you?
Our suggestion is to experiment with diverse ad copy variations. Keep the copy concise, precise, and focused to heighten ad response rates. While lengthier ads might attract fewer responses, they tend to draw more keenly interested buyers. Striking the right equilibrium is key – a harmonious blend of quantity and quality.
Financing
Buyers highly value sellers open to financing a part of the sale. Therefore, we strongly advise offering seller financing. Our consistent observation reveals that businesses for sale with seller financing tend to attract notably increased responses.
Small Business Administration (SBA)/Bank financing
Businesses pre-approved for SBA financing also attract increased responses, as they offer buyers a heightened cash-on-cash return.
Industry
Across the majority of portals, you have the autonomy to designate the category or industry (e.g., healthcare, technology, manufacturing, etc.) under which your business will be showcased. These categories typically align with specific industry classifications.
Prudent selection of the category is advised. In instances where your specialized business could appeal to those outside the industry, opting for broader, more popular categories might be beneficial. Furthermore, if feasible, consider positioning your ad within multiple categories to broaden your business’s exposure to a diverse array of potential buyers.
Annual Revenue
Buyers place greater significance on a business’s cash flow compared to its revenue, acknowledging the substantial variations in margins across diverse industries. Interestingly, certain business-for-sale portals have taken to omitting gross revenue from their search results. Nonetheless, the gross revenue information persists within the ad text, accessible only when a prospective buyer clicks to explore the details.
What Can I Do to Increase the Number of Responses?
Here’s your roadmap for success:
- Embed SDE or EBITDA into the ad.
- Set a sensible price point for the business.
- Forge a concise, attention-grabbing title.
- When feasible, target prominent metropolitan areas for advertising.
- Craft a succinct, impactful ad, bolstered by key highlights in bullet points.
- Extend the option of seller financing or secure SBA pre-approval.
- Experiment with multi-category positioning or occasional category shifts.
Updating the Ad
Enhance your ad, and your business gains renewed visibility as a fresh listing, enjoying elevated search result rankings. This amplifies our outreach to new audiences. Alternatively, we can opt to remove ads and repost them, effectively resurfacing them at the top.
How frequently should I update my ad?
Adjust your ad if it attracts less than one or two pre-screened buyers each month or if significant business changes occur. In instances where your ad doesn’t yield the desired response, consider revising it every 30 to 60 days.
The rationale behind this approach is simple:
- Refreshed ads, coupled with revised marketing strategies, often yield superior outcomes for the following reasons:
- Reposting an ad with a new title and image presents the business as a brand-new listing, drawing responses from untapped audiences.
- By relocating the ad to new categories, you tap into a fresh group of potential buyers who might not have encountered the business before.
- Removing the original ad and introducing the updated version thrusts it back to the top of the list.