You’ll often hear the internet gurus say ‘content is king’ and that in order to be successful in the online sphere you have to share lots of relevant content.
For some traditional business sellers, online marketing feels like the equivalent of walking around naked in public – you’ve got to show everything!
This presents a real conundrum for business sellers because, as many of our clients know, being in business can involve dealing with commercially sensitive information.
So, at the very least, you need to ensure you have a broker or someone advising you who understands those commercial sensitivities and you need to keep those sensitivities in mind when advertising your business in an online environment.
Prepare for trade-offs
The customers – or potential business buyers – want content. They want to do their research behind the scenes, in their own time, at their own speed, until they get to a threshold position.
Providing adequate content for them requires you to share a degree of detailed information about your business online. That’s where the trade-offs begin:
- Do you share your asking price or say POA?
- Do you disclose the business name?
- Do you not disclose the name, but instead talk about what industry it’s in and what region it’s in?
- How specifically do you list the products, services and people resources?
Remember, once it’s online it’s out there forever and it can be seen not only by potential purchasers, but also by your staff and your competitors.
A marketing program that is poorly considered, particularly when you’re selling a business, can be very detrimental to the ongoing operational performance and success of the business.
A rule of thumb in our business is that you can’t sell a business by hiding it under a bushel, so we assist and guide clients through the process of describing their businesses in quite a deal of detail. In fact, we’re known in the market for providing Information Memorandums (IMs or Business Profiles) on sale opportunities that are more detailed and more comprehensive than most.
Having said that, we will only provide a detailed IM to potential purchasers after they accept our confidentiality agreement. Before that step they can only access what we publish on our own website and digital marketing sites.
Put yourself in the buyer’s shoes
Requiring potential purchasers to accept a confidentiality agreement before learning anything about a business opportunity would definitely cost you buyers.
But publishing all of a business’s details on a digital advertising website for everyone to see carries its own risks.
So how do you find the right balance between putting too much information on a digital marketing site and not enough?
For a start, you can put yourself in the purchaser’s position and ask:
- What would I want to know?
- Is there enough information here for me to make a decision on whether this business is for me or not?
On the other side, you must consider the risks to your business of disclosing certain information online.
Get good advice
Finding that balance is something an experienced broker can help you with, because it’s important to understand the different sensitivities in each of the different marketplaces.
For example, in our role as business brokers we usually don’t advertise the price of businesses we’re marketing on behalf of clients. Having said that, in some markets advertising the price is absolutely the right thing to do and, in those cases, we’ll advise our clients accordingly.
Sometimes it’s right to advertise the brand of the business, because it’s part of the value proposition. At other times that information is something you might hold back, or alternatively talk about in a general sense until you pre-qualify the interested parties.
Pre-qualifying buyers: overcoming the email challenge
Many potential buyers are unwilling to interact with sellers or their brokers during the early research phase – instead they only want to communicate via email.
This can actually be an advantage for sellers, as today’s buyers are information hungry and adept at trawling through the internet’s enormous offerings. They can efficiently pick through various business opportunities and get to a shortlist without hassling you!
Despite this advantage, email communication does create challenges for the selling process, particularly how to qualify buyers and check they are a ‘good fit’ up front.
In our business, we are happy to accept initial email contact but we quickly let interested parties know the next communication will be via the telephone.
The reason we like to talk to people is because we’re acting for the seller. It’s our job to qualify potential purchasers on the seller’s behalf, to ensure they’re worth spending the seller’s valuable time and effort on.
A credible broker will help you pre-qualify those potential buyers, not just via email, but by phone and through face-to-face discussions so you know you are dealing with someone who actually has the wherewithal and ability to buy your business, notwithstanding you still have to go through the negotiation process.
Digital marketing sites the business world’s matchmakers
Selling a business is a matching process that requires both parties to have confidence in the information provided to them.
SEEK Commercial and other digital business selling services provide a credible platform for buyers and sellers to come together for that initial sharing of information.
James Price has over 30 years' experience in providing strategic, commercial and financial advice to Australian and international business clients. James' blogs provide business advice for aspiring and current small to mid-sized business owners, operators and managers.