How to market and sell strategic businesses

How to market and sell strategic businesses

This article explains why a combination of 4 marketing methods delivers the best results when marketing business opportunities in the $1M+ enterprise value market.

These methods are:

  1. Direct approach – narrow based target marketing;
  2. Web-based, press or industry publications;
  3. Broad based targeted direct marketing;
  4. Combination of the above, simultaneously

Criteria include: Speed of process – time in market; competition amongst buyers; price outcome; conversion rate and client confidentiality.

Assume that other factors that will influence the outcome are positive or neutral: realistic price expectation, quality of information, reputable process and saleable business or asset.

1. Direct Approach – narrow based target marketing
‘You only need one buyer’. If a deal can be struck with one of these few, this may be the quickest and most efficient process. If you are lucky!

A small number of targets (less than 10) is a very narrow base to work with. The likelihood of ending up with no interested parties is very high. The process stalls, deadlines are extended and things continue to deteriorate from there.

The fewer prospects, the easier it may be to maintain confidentiality.

2. Web-based, press or industry publications
Most web-based marketing is passive and relies on active buyers. But what if a buyer isn’t looking?

It is relatively cheap to post advertisements which are accessible online 24/7 to purchasers worldwide, reaching those in the market within and outside the industry.

3.  Broad based direct targeted marketing
The likelihood of success increases exponentially when a business opportunity is presented to those with the most to gain and the least to risk.

In the $1 Million+ Enterprise Value market, this includes buyers in the same or related industries.

Larger industry players and those in related industries can leverage an opportunity more effectively than general investors.

These are “Strategic buyers”. Making them aware of the opportunity is what direct marketing achieves.

Direct targeted marketing can put the opportunity in front of many target organisations and people, in the right industries, at the right time and on a scale.

The right database 
Not just any database will do the job.

Divest Merge Acquire/MNA Direct’s built-for-purpose M&A database has been tailored specifically for the M&A market, incorporating all the following features:

  • M&A database of over 215,000 companies, contacts and individuals across Australia and New Zealand has been specifically built to market business opportunities with Enterprise Values above $1M; primarily those suitable for B2B transactions.
  • Covers organisations with more than 10 employees and corporate, private and international investors.
  • The database is a product of investment over many years, with an estimated investment of more than $5M. It is understood to be one of the best sources of business intelligence available.
  • Used continuously and updated regularly;
  • Searchable and actionable by industries, regions or groups;
  • Categorised by relevant industry classifications (eg SIC codes);
  • Tracks each target organisation’s M&A aspirations;
  • Key data on each company (across 90+ active fields and hundreds of unique attributes);
  • Online accumulated history and investment parameters for active purchasers.

MNA Direct (an affiliate of Divest Merge Acquire) has formalised the direct marketing of business opportunities to the $1M+ market and made this facility available to others.

How to contact strategic buyers…
A combination of email and direct hard copy mailouts is generally most effective, depending on which is more likely to hit the target. While email is the preferred option, hard copy mailouts allow advisors to present the opportunity to a far wider audience of strategic buyers who haven’t subscribed or aren’t actively looking, but still fit the profile of buyers with the most to gain and least to risk.

Typical mailouts range between 1,000-3,000 targeted contacts per opportunity!

In combination with its in-house mail preparation and distribution capabilities, MNA Direct delivers a complete all-in-one package of direct, targeted marketing to key strategic buyer groups related to each individual opportunity.

The system promotes better results, faster. By targeting buyers more efficiently and with increased scope, MNA Direct enables M&A firms to attract a higher number of interested parties, increasing competition between target buyers and facilitating an accelerated process. Higher competition between parties with a strategic interest leads to the best possible results: higher prices and improved conversion/success rates.

4. Combination of the above, simultaneously 
Using a combination of web-based and direct marketing methods, Business Opportunities can be marketed with precision, scale and advisory input.

Getting the timing right
It is easier to control the process by managing who you approach and when, rather than by setting due dates.

It is better to have prospective purchasers move forward as a group, rather than singly or in dribs and drabs. That way the advisory firm can assess more than one offer simultaneously without having to set a date to try and gather them up, which is rarely achieved, leading to offering an extension.

It is best to work with the fastest and most highly motivated purchasers and allow the others an opportunity to catch up, rather than slow anyone down waiting for others.

Therefore it is usually better to approach key targets at the same time as approaching the wider industry.

This is exactly the opposite of how many M&A advisory firms operate!

Complete system
DMA’s MNA Direct system offers:

Complete direct marketing solution for M&A professionals.

  • Proven solution – database used by M&A professionals for more than a decade.
  • M&A database, mail house and response reporting ALL-IN-ONE.
  • Complements your other marketing activities.
  • Reach 1,000 targeted industry contacts by direct mail or email within 48 hours of activation for $3,850 plus GST*.

After agreeing on strategy, brief and targets, MNA Direct conducts all of the marketing in-house, collating responses and reporting all responses directly to advisory firms for follow-up.

For more information, visit www.mnadirect.com.

Posted in Sale Process.