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M&A Process | Using Targeted Campaigns to Sell Your Business

Is a targeted campaign the right choice for you and your business?

When it comes to devising a marketing campaign, one crucial factor to consider is the size of your business.

  • For small businesses, discreetly marketing your company on specialized portals emerges as the most potent strategy.
  • In the case of mid-sized businesses, we strongly advocate extending your reach to include potential buyers beyond your immediate circle, such as competitors and other companies, through precisely tailored campaigns.

A targeted campaign involves the direct outreach to potential corporate buyers, often referred to by many M&A advisors as a “private auction.” This entails the meticulous compilation of a list of prospective corporate buyers, followed by direct communication through emails, letters, and phone calls. Another avenue for targeting corporate buyers lies in select trade publications.

It’s imperative to acknowledge that selling your company to a corporate buyer or competitor carries both advantages and disadvantages, necessitating careful consideration. It’s essential to recognize that targeted campaigns are not a one-size-fits-all solution.

In this article, we delve into the mechanics of targeted marketing campaigns, shedding light on their inherent strengths and weaknesses. We also explore the various categories of corporate buyers and identify those most likely to express interest in your business. Finally, we provide an overview of the optimal approach for reaching out to these potential buyers and outline the associated fees.

If you find yourself uncertain about whether a targeted campaign is the right fit for your situation, rest assured that you’re just 15 minutes away from gaining valuable insights to make an informed decision.

Advantages and Disadvantages of Targeted Campaigns

Advantages of Targeted Campaigns:

  • Industry Expertise: Competitors are already well-versed in your industry and market, making them motivated buyers looking to expand their market share.
  • Transaction Knowledge: Competitors often understand the intricacies of business purchases, leading to smoother transactions compared to first-time individual buyers.
  • Potential Higher Sale Price: In certain industries, competitors or corporate buyers may offer substantially more for your business than individual buyers.

Disadvantages of Targeted Campaigns:

  • Confidentiality Risks: Revealing your intention to sell your business to competitors can be risky in terms of confidentiality.
  • Lower Probability: In specific industries, the chances of selling to a competitor or corporate buyer may be minimal.
  • Potential Lower Sale Price: In certain industries, competitors or corporate buyers might offer less for your business, especially if they can easily replicate it at a lower cost than your asking price.

Determining if a Targeted Campaign is Right For Your Company

Business Size: Selling Small vs. Mid-Sized Enterprises

  • Selling a Small Business: Small businesses, typically those with annual revenues under $5 million to $10 million or EBITDA under $1 million, are predominantly acquired by individual buyers, accounting for 95% to 99% of such transactions. However, targeted campaigns can be a valuable strategy for a specific subset of smaller businesses.
  • Selling a Mid-Sized Business: Targeted campaigns are almost universally effective for middle-market businesses with EBITDA ranging from $1 million to $5 million annually.

Buyers: Individuals vs. Corporate Buyers

  • Individuals: Small business sales tend to attract individual buyers. The most streamlined and cost-efficient way to reach these potential buyers is through targeted media channels such as web portals and industry journals where individuals have already expressed their interest as potential buyers. In essence, this group has been pre-qualified, enhancing the efficiency and cost-effectiveness of the process.
  • Corporate Buyers: Mid-sized businesses are more likely to be purchased by corporations. Most corporate buyers seek businesses generating at least $10 million in annual revenue, with exceptions occurring in certain industries, such as landscaping, where competitors regularly acquire smaller businesses.

Types of Corporate Buyers

Let’s explore the various types of corporate buyers:

  • Direct Competitor, Different Geography: These businesses operate in the same industry but might seek to expand into your region. For more insights, you can listen to my podcast featuring the Head of M&A for an $18 billion company, discussing their regular acquisitions of direct competitors in different locations.
  • Direct Competitor, Same Geography: These businesses share your industry and geographical area. This is common in industries where market growth has stagnated, and competitors fiercely vie for market share, like commercial cleaning or lawn care. Acquiring a competitor often proves more cost-effective than attempting to expand through advertising.
  • Indirect Competitor: In this scenario, the buyer aims to enter a new market or offer their products or services to your existing client base. For instance, a food distributor might consider acquiring a food manufacturer instead of starting from scratch. If you approach a company with this potential synergy, be ready to demonstrate the advantages and potential clearly and concisely.
  • Customers: Your most loyal customers can also be potential buyers. They advocate for your business within their networks because they appreciate what you provide. They might make significant and frequent purchases or have expressed interest in business deals, offers, or opportunities in the past. Don’t underestimate the importance of this group as potential buyers.
  • Suppliers: Businesses often acquire other companies they have existing connections with. Instead of outsourcing to your company, it can be more profitable for them to integrate your services into their corporate structure. Such acquisitions can enhance the value chain, particularly for companies expanding into new industries or areas.

Do Small Companies Buy Businesses?

Smaller companies typically experience organic growth through gradual increases in their marketing and advertising budgets. Many of them operate in a state of disorganized chaos, often focused on chasing the next big deal or customer. Consequently, they lack the time and financial resources required to pursue acquisitions as a viable growth strategy.

Attempting to sell your business to a smaller company often proves to be an inefficient approach that can consume a significant amount of time.

EBITDA, EBITDA, EBITDA: Once again, the primary criterion that larger companies use to assess the viability of an acquisition is EBITDA. These companies typically seek a minimum annual EBITDA ranging from $1 million to $10 million or more.

Why? The rationale is straightforward — the effort required to complete a $1 million deal is nearly identical to that of a $25 million transaction. Additionally, the professional fees associated with these acquisitions are relatively consistent, regardless of the deal’s size, although they may be slightly higher for larger transactions.

For instance, a $1 million deal might incur fees and expenses of $50,000 or more (equivalent to 5% of the deal size), whereas a $25 million transaction might result in fees ranging from $150,000 to $300,000 (equivalent to 0.6% to 1.2%). This means that the percentage of fees and expenses decreases as the deal size increases. Therefore, conducting larger deals is more cost-effective for the buyer.

To achieve the same impact as acquiring a single company with an annual cash flow of $25 million, a company would need to invest in 25 businesses, each generating at least $1 million in annual cash flow. Consequently, pursuing larger acquisitions is more efficient, both in terms of cost and time.

The Ideal Corporate Buyer

Let’s pinpoint the key traits of the perfect corporate buyer:

  • Proven Acquisition History: The ideal corporate buyer has a track record of prior acquisitions. Focus your efforts on targets that demonstrate readiness, willingness, and the capacity to take action. You can gauge this by researching the company’s acquisition history over the past one to five years. The more acquisitions or companies the corporate buyer has recently taken under its wing, the more likely it is to consider another acquisition.
  • Robust Financial Standing: Look for corporate buyers that boast a minimum of $10 million in annual revenue and are at least three times the size of your company. Most smaller companies lack the financial muscle and inclination to invest millions in acquiring a competitor. While exceptions exist, mid-sized and larger companies are typically the ones actively growing through acquisitions. Be cautious when smaller companies with annual revenue below $10 million approach you. Why? Smaller companies often find themselves engrossed in firefighting and chasing immediate clients, rather than forming a dedicated team to strategize and execute acquisitions. While occasional exceptions occur, the ideal corporate buyer should generate at least $10 million in yearly revenue and be at least three times the size of your company. For instance, if your company generates $5 million annually, the ideal buyer should tally at least $15 million in yearly revenue.

Process for Targeted Campaigns

When conducting a targeted campaign, our process is meticulously designed to collaborate closely with the seller in order to curate a comprehensive list of potential buyers, encompassing both corporations and competitors. Subsequently, we initiate contact with these prospective buyers, introducing them to your Teaser Profile, a document strategically crafted to pique their interest. Our follow-up efforts are dedicated to assessing the viability of these prospects. Rest assured, throughout this entire process, the utmost confidentiality of your business is maintained, as the Teaser Profile deliberately refrains from disclosing your company’s identity.

Here’s an overview of the methodical steps we follow:

Research & Compilation of the List:

  • The seller provides CasinosBroker with an initial list of potential buyers.
  • Our team at CasinosBroker conducts exhaustive research to identify additional potential buyers, refining the list further.
  • A comprehensive spreadsheet is compiled, meticulously detailing the contact information of these potential buyers.

Initial Outreach & Follow-Up:

  • CasinosBroker initiates contact with potential buyers, disseminating the Teaser Profile through multiple communication channels.
  • We request that prospective buyers sign a non-disclosure agreement (NDA) should they wish to access additional information about your company.
  • For those who do not respond to the initial outreach, our team diligently follows up through various contact methods.

Buyers Sign the NDA & Receive the CIM (Confidential Information Memorandum):

  • CasinosBroker facilitates the NDA signing process with interested buyers.
  • The CIM, a comprehensive document providing valuable insights into your business, is emailed to the buyer.
  • Our team remains readily available to address any inquiries or concerns that potential buyers may have regarding your business.

Negotiation of Letter of Intent (LOI):

  • In cases where buyers express interest in progressing further, CasinosBroker takes charge of negotiations related to the submission of a Letter of Intent (LOI).

Preparing the List

Do I need to compile a list of potential buyers? While it’s beneficial if you can provide an initial list of companies you deem suitable, rest assured that we will take your list and expand upon it. Our team will conduct thorough research to uncover additional prospects, ensuring a comprehensive approach.

What’s the ideal list size? The preferred list size varies based on your business type and industry. In general, we recommend an ideal roster that encompasses at least 50 to 100 names. However, in cases where the names on the list display a high level of interest or if these companies have actively pursued you previously, smaller lists can prove sufficient.

How can I create a list of potential acquirers for my business? Our recommended approach begins with researching direct competitors, followed by exploring indirect competitors, and eventually considering companies within related industries. Should you opt for a targeted campaign, we will collaborate to devise a strategic plan, identifying the types of companies that may express an interest in acquiring your business. Industry catalogs serve as valuable resources for generating ideas and identifying potential acquirers.

Is the process different from other methods of selling my business? Yes, negotiating with competitors often demands a more rigorous approach. It’s advisable to have your attorney ready to manage any necessary revisions to the non-disclosure agreement, letter of intent, and purchase agreement during this process. We are committed to navigating these complexities with confidence and professionalism to facilitate a successful transaction.

Targeted Marketing in Publications

Instead of reaching out to buyers directly, another option is to promote your business through various publications. Here’s a breakdown of the types of publications that could be effective for marketing your business:

  • Trade publications: These are industry-specific magazines or journals.
  • Other publications targeting potential buyers: Consider publications that cater to individuals or companies interested in your business niche. For instance, if you’re in the medical field, medical journals might be a suitable choice.
  • Online blogs or forums: Explore relevant online platforms where your target audience frequently gathers
  • Any other publication serving your target market: Be open to any publication that aligns with your target demographic.


What are the typical publication costs?

Publication expenses can significantly vary, contingent on the industry and the publication itself. Rates may start as low as $50 and climb to several thousand dollars, particularly for national publications with precise targeting.

Can this method complement other marketing approaches for selling my business?

Absolutely, we encourage combining various marketing methods for certain businesses.

Is it advisable to utilize targeted publications for all businesses?

No, generally, this strategy is most relevant for highly specialized businesses.

What kind of response should I anticipate?

Response rates hinge heavily on the specific publication and its readership, making it challenging, if not impossible, to provide a precise estimate.

What’s the recommended duration for advertising in these publications?

We recommend a month-by-month approach, allowing you to adapt your strategy based on the response you receive.

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