How to Sell Your Business – Fish in a Pond with Fish

How to Sell Your Business – A story about a father and son and boxing coach fishing

A Fishing Story that is also about How to Sell Your Business by Greg Caruso, Harvest Business, Business Brokers and Business Valuation Experts with offices in Maryland and New Jersey


When I was young my brother and I went fishing with my dad several times.  While it was a wonderful outdoor experience we went to dead rivers and never caught fish.

Later, my brother had a crazy boxing coach “Bud” who fished a lot.  Bud took us fishing.  Bud could catch fish.  He had special lures.  Bud had special ponds.  We were catching – not just fishing.

Bud took us to one pond and we caught so many fish it seemed like we were cheating.  When leaving the farm, Bud instructed us to report to the owner that we didn’t do well but would like to come back.

Bud explained (this was 40 years ago) that he would get a ride in a small plane and look for farm ponds.  He would then go ask the owners if he could fish them.  They usually said, “You can try but there’s nothing there.”

Sounds basic, even silly, but this was a huge revelation to me.  Fishing where there were lots of fish.  It made a huge difference in results.

Hard to believe but many business owners when they go to sell their businesses go to the wrong places and ask the wrong people.  They are in effect, fishing in the dead river like we were instead of fishing in the plentiful pond.

How do you find the plentiful pond?  Bud rode shotgun in small planes.  Business owners should determine who their best buyers are.   Then they have to determine how to reach those buyers.  The tricky part is your best buyer is not always who it seems and it often varies by industry.

Here are a few rules of thumb we have learned.  We have also learned that we need to ask a lot of questions as we get started to confirm our hunches and sometimes to change them.  Please just remember while rules of thumb are useful they are not always right.  Lots of exceptions which is one of the reasons you really should get an expert on your team.

If you industry has strong synergies, i.e. big cost savings or sometimes sales advantages due to size, (the easiest cost savings synergy to visualize is two delivery companies with half full trucks on essentially the same routes) then an industry buyer may be your best buyer.  But, don’t look to the giants in your industry.  Look to the company that is 2 to 5 times larger.  The reason is that buying you will move the needle for them without usually putting the whole business at risk.

If your industry has low technical requirements, or you have very good technical people in place, then your best buyer may be an individual investor, or an investor group looking for a “good business with earnings.”   The SBA business loan program has given individual investors a strong finance tool for businesses typically up to about a $3,000,000 price range.

If your industry has high technical requirements and you do not have sufficient highly trained staff then you are looking at selling to someone with direct industry experience.

If your business is very important to certain suppliers or customers they may be interested in acquiring you.

If you can identify specific companies or targets direct mail and cold calling is effective.  For individual buyers you can use the internet listing services.  For private equity groups there are listing services they subscribe to but they are not public sites.  Some quality brokers do access them.

In many cases your strategy should include reaching out to several groups, but focus on your best buyers.  Qualify your calls to find the best buyers.  Work to keep them interested or bring them back.

One last note.  My story mentioned that Bud had special lures too.  The equivalent of that is to make sure your company is desirable to your best buyer group.  Otherwise you may attract buyers but you will not get to closing.  Generally this means have management in place, be highly profitable, and know why customers allow you to make that profit.

Happy catching – I mean fishing.