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Tip #116: What are the types of buyers for a business?
There are three main types of buyers for a business — Individuals, Strategic and Financial/Private Equity Groups. They usually all prefer to see strong cash flow, but each have certain motivations and issues. Individual buyers oftentimes need to get financing, either from the SBA, the seller or both. Strategic buyers (corporate) are looking for products or services, markets or profitability that will help their business grow. Private Equity firms are targeting especially strong cash flow and key employees to run the company going forward. Understanding which type of buyer would be most interested will help an owner prepare the business for a sale.
