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Marketing a Business for Sale

Erik Sullivan

Sellers Seller Articles Seller FAQ

You’re thinking about selling your business, and you’re curious about how it will be marketed for sale.  

As a business owner, you probably have a good grasp on marketing, whether it’s through flyers, radio, online ads, or other traditional techniques.  

But what about marketing your business for sale?  

Marketing your business for sale typically requires the work of an experienced business broker or M&A advisor who creates both public and confidential marketing materials to share with pre-screened buyers for your company.  

Reaching a substantial pool of buyers is important to receive the best price and terms for your business, but doing so without compromising your confidentiality requires a thoughtful approach.  

At MidStreet, we’ve confidentially marketed hundreds of businesses. In this blog, we’ll explain what marketing materials look like, what information you should share with potential buyers, how the materials will be used to market your business, and the importance of confidentiality along the way. 

Let’s get started!  

A Word on Confidentiality

Before we jump in, it’s important to discuss confidentiality. Most business owners instinctively know they don’t want their personal and/or business information available to just anybody. If you’re not familiar with the concept of confidentiality, check out our blog “Confidentiality When Selling a Business.” 

To protect confidentiality, M&A Advisors use both public and private materials during the marketing process.

Simply put, public marketing materials are like billboards. Anyone can see them if they know where to look.  

Private marketing materials are reserved for qualified buyers only.  

Qualifying a buyer is a multi-step process. At a minimum, we recommend interviewing buyers, having them submit proof of financial capability, and signing a non-disclosure agreement (NDA) before sharing any private materials. 

Below, we’ll talk about the different marketing materials and mark them as either Public or Private 

What Are Marketing Materials

When marketing a business for sale, there are two main items M&A Advisors will provide, along with two others that are optional and less common. You can expect most M&A advisors to create a blind profile to list your business, and a confidential information memorandum (CIM) to share with potential buyers.  

Some firms may also provide a teaser video and a confidential marketing video, but these materials are far less common.

Blind Ad (Public)

A blind ad is a 250-400 word summary of your business posted on the common listing sites where businesses are sold. Its purpose is to entice buyers to learn more about your business without giving away any sensitive, identifying information. 

Blind ads are created with confidentiality in mind and won’t include the name or address of your business. Instead, a brief description of your business will be used as the title of the listing.

For example, MidStreet represented the sale of a Disaster Restoration Company in 2022. Here’s the blind profile that was released during the marketing process to attract buyers. blind ad business sale

Using just the blind profile above, you should not be able to identify the company.

In this listing, there is other preliminary information made public to generate interest in your business. At a minimum, a blind ad usually includes: 

  • Relative location (state or region only) 
  • Asking price 
  • High-level Financial Summary 
  • Business Summary 

Be thoughtful when selecting what information should be publicly shared during the sale of your business. Avoid identifying information and other sensitive details until your intermediary has thoroughly vetted potential buyers and had them sign a non-disclosure agreement (NDA). 

Teaser Video (Public) 

Not all companies create teaser videos, but they can be a differentiator when buyers are comparing opportunities on the market. Teaser Videos are essentially Blind Profiles in video format.  

Click the image below to see an example! 

 teaser video example

Confidential Information Memorandum (Private) 

So, if the nitty-gritty details about your business can’t be shared publicly, how do buyers learn more?  

This is where your business’s confidential information memorandum (CIM) comes in.  

You may have heard a CIM referred to by one of its many names: the book, confidential business review, the pitch book, selling memorandum, and offering memorandum to name a few.  

Whatever you’d like to call it, a CIM is an exhaustive marketing document that offers a more in-depth summary of your business. A CIM will: 

  • Outline your business’s attractive features 
  • Describe future growth potential, barriers to entry, and potential competition 
  • Share some financial information 
  • Provide basic business information 
  • Detail desired deal-structures 
  • Get buyers excited about the opportunity

While a CIM will give buyers access to some sensitive information, you don’t want to disclose too much up front. It’s important to remember while NDAs attempt to provide protection for your business’s information, they aren’t bulletproof, and people have violated them.  

For this reason, you don’t want your CIM to include: 

  • Tax returns 
  • Employee names and personal info 
  • Customer names 
  • Trade secrets 
  • Financials older than five years 

These items will be shared with the buyer after you’ve accepted their Letter of Intent and entered due diligence. 

NOTE

Most NDAs include language that allow the buyer to share the marketing materials with their professional advisors, but outside of that, no one else should have access to your information.

Marketing Video (Private) 

Marketing videos allow your buyer to get a first-hand look at the facilities and hear the owner explain their business and its operations.  

This is an optional marketing material, but we’ve seen it make a big impact on the way buyers view your business. 

Imagine for a moment you’re a buyer reviewing the marketing materials for several businesses. You’ve spent all day reading 30-50 page CIMs that contain long-form text, graphs, and maybe a few photos of the property, and you’re not sure which one is worth your investment.  

But then, you open up the marketing materials for a business and see that they included a video.  

You start watching and immediately become engaged by detailed looks at the business’s facilities and surrounding area. A few more seconds in and you’re introduced to the owner, who begins speaking passionately about the business they built and explaining how the business functions. All the while, clips of the business in full operation transition on the screen while the owner starts to explain why they want to sell.  

The video ends with a summary of the seller’s goals for the business sale and a quick call to action asking the viewer to contact the listing broker or advisor for more information. 

Wouldn’t that business stand out a bit more than those with only a CIM and a blind ad? 

Click on the example below if you’re still not convinced: 

marketing video example

Finding the Buyers 

So – now you understand what is being sent to buyers. So how do you find them? 

There are several ways business brokers and M&A advisors find buyers, but generally you can break it into two methods: Inbound and Outbound. Let’s cover the main inbound and outbound methods for finding the buyer.  

Inbound 

As a business owner, you may be familiar with websites like BizBuySellBizQuest, or Axial. Home to the "Blind Profile" we previously discussed, these sites are commonly used by Business Brokers and M&A Advisors. This is the main inbound channel for buyers to inquire on your business. 

Outbound 

Part of any good marketing process should include a solid outbound buyer strategy. Your M&A advisor or business broker should create a list of potential buyers from public databases, manual research, and buyer contacts they’ve created through their time in the industry.  

Marketing Your Business FAQ 

Marketing your business requires hours of work between you and your intermediary. There will be document requests, phone calls, and several email exchanges involved. 

With all the moving parts, you may still have questions. Here are a few we’ve gotten from business owners throughout the years: 

1. How much does it cost to market a business for sale? 

Generally speaking, an M&A advisor’s marketing efforts are included in either the work fee or success fee they charge to sell your business. 

2. Can I market my business myself? 

While using an M&A advisor isn’t required to market and sell your business, we highly recommend it. Attempting to market your business yourself could lead to confidentiality risks, less interest in your business, and ultimately a lower purchase price.  

3. When do the marketing efforts start?  

Since your business’s marketing materials are necessary to create buyer interest, they are generally created within a few weeks of signing a listing agreement with an M&A firm. 

4. How is information kept confidential? 

Your M&A advisor should have a thorough screening process for qualifying buyers.

This process will often include an initial phone call between your M&A advisor and the prospective buyer which will include several preliminary questions to filter out inquirers who aren't serious about an acquisition. 

Understanding the Marketing Process 

Now that you know a little more about the marketing process, you have a better idea of what to expect once you sign a listing agreement with a broker or M&A advisor.  

It can be extremely time-consuming to gather the documents once requests start coming in, which is why it’s always better to prepare your business for sale before it’s time to create its marketing materials. 

To learn more about how you can get ready to sell your business, check out our blogs “10 ways to prepare your business for sale” and “How to Prepare Your Financials for the Sale of Your Business. 

Remember, your business doesn’t stop operating when the document requests start coming in. To save yourself the headache of managing your business and fulfilling document requests, you need to be able to balance your daily operations with the time you spend speaking with your broker.  

If you still have questions about how your business will be marketed for sale, or would like to ask about MidStreet’s marketing process, feel free to contact us today. We’ve marketed hundreds of business for sale and would love to address any of your concerns about required documents, confidentiality, or anything else.

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