The Importance of Finding Motivated Sellers When Buying a Business

Acquiring a business successfully involves multiple factors. And often, the difference between a good deal and a great one comes down to finding a motivated seller.

Over the years we’ve seen first-hand how pivotal this can be. Here we’re going to delve into identifying motivated sellers and all the benefits this holds when you’re looking to secure your next investment opportunity.

What do motivated sellers look like?

Simply put, an ownership that needs or wants a quick exit. This could be due to circumstances including:

• Retirement
• Career break
• Health
• Divorce/separation
• All ambitions achieved
• Disputes between owners
• Financial
• Other opportunities to explore
• Market conditions/forecasts

The benefits of finding motivated sellers

The negotiations

Motivated sellers by nature need to find a quick sale, so they’re often inclined to be more flexible in the negotiations. They want the best deal depending on their reason for engineering a quick exit but will often be more willing to accept concessions. It’s not all about the sale price itself, a lot of different terms can make up the overall deal.

Transparency

Positive or negative, motivated sellers are often more transparent and forthcoming about their businesses. They know the urgency of their situation and therefore recognise the need to make sure things don’t take longer than they need to. This leads to motivated sellers sometimes providing more comprehensive financial records, operational insights, and other information upfront that you may be left waiting for from less motivated sellers. This allows you to start your due diligence sooner and more cost effectively.

Mentally ready

When you find a suitably motivated seller there is less chance of the deal falling through. Motivated sellers are motivated for a reason – they are ready to make a change. They want the deal to happen as much as you do – they’re very unlikely to have a sudden change of thought. This creates the perfect balance whereby the buyer and seller are motivated by the same objective – to make the transaction work – and to make it work fast.

Additional opportunities/more value

This comes down to recognising the unique motivations of the seller. Why are they looking for a seamless, swift exit, but also take the time to understand what they need a deal to look like? How can you use this knowledge to help move things along and create a more value-based transaction for all parties? And, how as the buyer can you use this insight to create new opportunities for the business once you complete your purchase?

How to find motivated business sellers

You can research online or become a savvy networker in your area by attending plenty of business networking events, but by far the quickest and most effective way is to find a well-connected expert in the area.

At Business Partnership we specialise in connecting buyers with motivated sellers and facilitating mutually beneficial transactions. With our extensive network of partners across the UK and personalised approach we can help you find and secure your next venture.

Call our team on 0207 145 0040 or find your local partner here.