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3 Types of Buyers & the Different Ways They Value Your Chauffeur Business

Last updated on July 18, 2012 by Sozo Staff

Just like business owners have various reasons for selling a business, buyers have different incentives for purchasing one. When a company fits with an investor’s goals, they will be more willing to buy your limo business – and may even pay a premium for it. By better understanding the motivations behind different types of buyers, sellers can improve their prospects of a satisfying sale by targeting the right buyer for their business.

Financial

While all buyers are understandably interested in your company’s financial performance, most will have other concerns, too. But financial buyers care about your numbers above all else. A financial buyer may be someone looking to quickly replace their main source of income or another business owner hoping to drastically increase the value of their company by acquiring another limousine business. They’re less intrigued with the possibility of future value and more focused on current earnings and the potential for cost efficiency. If your chauffeur business is booming, a financial buyer may pay handsomely for it. However, if much of your company’s appeal lies in intangible assets such as a respected reputation or extensive customer list, you may be better suited by a buyer who values these things.

Lifestyle

Like many financial buyers, lifestyle buyers seek an instantaneous and steady income stream. But while the primary objective of a financial buyer is to maximize limo business profits, lifestyle buyers are more interested in buying a job than making a fortune. Often times, these investors are simply looking for a change of pace. Maybe they’ve been laid off from a prior job or are seeking to escape the corporate world. Lifestyle buyers may have little experience in the limousine industry or they may have a past as a limo driver or other limousine business employee. While they may be able to secure some outside financing, they will likely rely on much of their own money to fund the purchase of a limousine business for sale. Lifestyle buyers may have less leeway when it comes to negotiating a price, but can be highly motivated if your business fits their specific goals.

Strategic

Strategic buyers have the ability to look beyond financial statements and tax returns in order to achieve synergistic benefits. A strategic buyer may be another limousine business (or even a non-related business) interested in using your company as a launching platform to reach new markets. They may be an investor looking for a company able to “run itself,” thanks to experienced employees and a well-known brand. While a financial buyer may settle for average returns, a strategic buyer might be willing to forgo immediate payoff for the anticipation of higher returns in the future. If buying a limousine business offers the right combination of benefits, strategic buyers can often justify a higher price.

By understanding what drives different types of buyers, sellers may be able to enhance their position. With an extensive industry database, our experienced limo business brokers have the ability to identify and reach out to the buyers most likely to appreciate – and pay a premium for – the unique value in your business.

Filed Under: Transportation

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