If you want to reach your best possible buyer, you first need to understand who that buyer is. Buyers come in different shapes and sizes, but limousine business investors generally fall into two groups: financial buyers and strategic buyers. When you understand what makes each type of buyer tick, you can highlight the features of your business that may be most attractive to them.
Financial Buyers
As the name implies, a financial buyer is primarily interested in earnings. This buyer is usually an individual who is looking to buy a job. In other words, your business will probably become his or her main source of income. Financial buyers can be local, or they may live on the other side of the country. They often have little to no experience with the limousine business, but may be attracted to the allure of luxury transportation. They tend to gravitate toward well-established businesses that offer a stable customer base and immediate profits.
Of course, financial buyers will also be interested in your potential for growth. But above all else, this buyer is shopping for a company in an exciting industry that will provide positive returns. If you want to hook a financial buyer, your best bet is to provide detailed data about your financials, market, and the outlook in the limo industry. Since these types of buyers tend to be new to the market, they don’t always have a clear picture of it; you’ve got to draw one for them. Now, if your business isn’t exactly bringing home big bacon, that doesn’t mean it won’t have value to the right buyer. This may be where your other potential investor – the strategic buyer – comes in.
Strategic Buyers
Most strategic buyers are well-versed in limousine businesses. In fact, many already own one. These buyers are after something more intangible than profits: synergies. For instance, a strategic buyer may be a fellow business owner who needs to rapidly replace lost accounts. Buying a new customer list is easier than building one from scratch. Often times, strategic buyers are interested in your geographic location, whether they are a local competitor looking to expand territory or a business halfway across the country – or the world – looking to target a brand new region. Maybe you have something their company lacks, such as an automated call center or a party bus unit. Perhaps they simply would like to enjoy the lowered overhead costs that go hand-in-hand with increased size.
As opposed to a financial buyer, a strategic buyer is interested in potential. You don’t need to convince this buyer of the benefits of the limo business; you need to convince them of the benefits of buying your limousine business. Since there’s an opportunity for a strategic buyer to increase profits, it’s important that you value your business accordingly. This is why it’s impossible to accurately value a business based on external factors like size and cash flow. When trying to figure out how to value a limousine business, having an industry-experienced third party can help. A better understanding of your valuation can help you target your best buyer, no matter who they may be.