SELLING A BUSINESS

Selling Your Business? Write Ads That Attract Pre-Qualified Buyers

Writing the perfect advertisement for your business for sale is a fine art. Here's what you should reveal and what you should not.
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Advertising your business can result in more leads and a higher ultimate selling price, but revealing that you are selling can cause problems with employees and suppliers and/or give competitors a leg-up with your customers. The key to advertising your business walking the line between effective marketing and preserving confidentiality is a well-crafted ad.

 Writing business-for-sale ads is an exercise in fine balance.

  • You have to entice prospective buyers about the current and potential strength of your business without even slightly stretching facts, which you'll have to warrant as accurate at the time of an actual purchase.
  • You have to tell enough about your business to make buyers think they'd like to know more, but you can't tell so much that readersparticularly competitorscan piece together the facts into a description of your business.
  • You have to keep ads short yet build enough interest and trust to prompt prospective buyers not just to respond, but to respond with information about their financial and business capability to make a purchase.
  • You have to indicate enough about your business size and price to attract interest from those qualified to make the purchase while allowing those who don't match up with your asking price to rule themselves out.
  • And maybe most importantly, you have to make your business stand out from the crowd of other businesses listed in the same place, whether it is on an online business-for-sale marketplace, a classified ad, or an ad in a trade publication

It's a tall order.

Here are some easy-to-follow tips on what to know and what to do as you develop your business-for-sale ads.

Step 1. Provide a concise yet thorough description of your business offering.

In a matter of sentences, your ad needs to provide an overview of what your business is and why it's an attractive purchase opportunity, all without stretching the truth or presenting information you can't later warrant as true and accurate.

Here's what to convey:

What buyer wants to know

Advice to follow

What your business is and does

Be clear and specific. Instead of "Manufacturing Business" say "Manufacturer of low-tech product for high-tech industry." Instead of "Advertising agency" say "Profitable 15-year advertising agency in growing metro area serving a roster of regional and national clients."

Where your business is located

If your business is in New York City, say so, but if it's in a small town with only a few other businesses that fit the description, stating your exact location may give away your identity and sale intentions. Especially online, buyers search for businesses by location, so you can't avoid the location issue altogether. Instead, give a general description. Instead of "Columbus, Ohio," say, "Located in Ohio," or "Located in a vibrant Ohio college town."

How long you've been in business

Buyers want to know if your business is established. You can convey this information in your description (profitable 12-year old jazz bar) or in your statement of strengths (serving government and commercial contracts since 2002).

The strengths or attributes that make your business attractive

In your ads, feature your strengths. "Profitable and growing," "in highly desirable location," "strong earnings," "well-known, highly regarded business name," "loyal staff and clients," "strong online and social media presence," "good growth potential." Just be sure every adjective you use can stand up to scrutiny, as you'll need to warrant accuracy when signing a purchase offer.

Your asking price

Not everyone agrees about stating an asking price, feeling it might scare some buyers away. Most advisors agree, however, that the advantages outweigh the disadvantages. Consensus is: State your asking price and most recent annual revenues. For one thing, online buyers shop by price category and if your price is missing your business won't appear in the results. For another, if you don't list a price you risk inspiring inquiries from those without the capabilities to complete a deal of your size.

Why you're selling

While it's not required, a description of why you're selling often inspires trust and increases response rates. Keep in mind that some reasons are very understandable; i.e., "retirement" or "death in the family," while others will discourage buyer responses; i.e., "burned out," or "declining business."

 

Business sale advisors agree on one point above all others: The less specific the business description presented in your sale ad, the more your business looks like any other. Your job is to compress the facts and strengths into a short ad that makes a buyer want to know more. Certified Business Appraiser Glen Cooper gives this example:

"Manufacturer for Sale. Call Broker. 555-1212" will get a minimal response. Describing the business for sale as a "Manufacturer of low-tech product" will get a better response. "Manufacturer of low-tech product serving a high-tech market" will get the best response.

Bottom line: Adding details to an ad usually improves response.

Step 2. Don't give away your business identity.

Protect your business identity in two ways:

  • Place "blind ads" that don't reveal your business name or address, and that camouflage your identity by describing attributes without revealing facts buyers (or competitors) can link specifically to your business. When advertising using online sites, these ads are called "blind listings." Using a broker also solves this problem, as brokers will market your business and have inquiries directed to their office.
  • Use the identity-protecting features on business-for-sale listing sites, which allow you to direct buyers to click to "contact the seller," after which they're prompted to enter information required by your listing. For instance, on BizBuySell you can mention in your listing that there is a "Confidentiality agreement required," followed by instructions on how to print and submit the required form. You can also set your inquiry-response screen to read, "The party offering this business for sale asks you to please include the following information," followed by such specific requests as the buyer's preferred timeframe and investment capability.

Step 3. Help buyers self-qualify themselves by providing clearly defined purchase requirements.

State the annual revenues of your business as a way to help buyers determine whether your business is too large or too small to match their interests. Likewise, state your asking price to allow buyers to match their financial capabilities with your offering before responding to your ad. Though it seems counter-intuitive to write ads that narrow the response pool, when it comes to sharing information about your business, the goal is to deal only with those most interested and capable of making the purchase.

Step 4: Request inquiry responses that allow you to prescreen buyers.

Don't limit your response invitation to a simple statement such as "contact the seller for more information." Instead, request and require specific information from respondents, including:

  • Why they're interested in purchasing a business like yours.
  • Their approximate timeframe.
  • Their business experience.
  • Their financial capability.

Online sites allow you to require this information as part of your listing-response mechanism in your description of the business, and if you're using a broker, that person will prescreen responses on your behalf. If you're placing your own ads, your email response instructions might read, "Thank you for your inquiry about my business. Please reply with a description of your business background, the type and size business you seek to acquire, when you plan to purchase a business, your investment capability, and your interest in this business." While you may turn off some potential buyers, it is most likely that serious buyers will understand your efforts and reply with the requested information.

Step 5. Include a means to track ad responses.

If you place business-for-sale ads in a number of outlets, be prepared to track which placements draw the greatest number of well-qualified responses. This will help you reword non-performing ads to better reflect the content of well-producing ads. Also, if the identical ad works better in one media outlet than another, the finding may help you decide to concentrate your efforts in the media outlet that performs best. When using newspaper ads and online listing sites you can collect responses through the media channel for easy tracking. Keep in mind that the average business takes 6-12 months to sell, from beginning to end, so you will likely be "renewing" your advertising. For this reason, it will help to understand which advertising outlets have generated buyer inquiries and which have not.

In next week’s installment of “Selling Your Small Business” we’ll discuss some tips to help you create compelling online ads.   

Editor’s Note: This article is the thirteenth piece in a series taken from BizBuySell.com’s Guide to Selling Your Small Business. The guide is a comprehensive manual to help small business owners maximize their success when the day to sell arrives. Each Wednesday, Inc.com will publish a new section of the guide outlining BizBuySell.com’s best practices, from the initial planning stages of a sale all the way through negotiations and post-sale transition.

IMAGE: Shutterstock
Last updated: Jun 6, 2012

MIKE HANDELSMAN | BizBuySell.com

Mike Handelsman is group general manager for BizBuySell.com and BizQuest.com, the Internet's largest and most heavily trafficked business-for-sale marketplaces.




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