Finding the Right Buyer for Your Business: Who’s Actually Worth Selling To?

You’ve spent years—maybe decades—building your business.

You’ve put in the hours, fought through downturns, and kept your team running when others shut their doors.

Now, you’re thinking about selling.

But who you sell to matters just as much as how much you sell for.

The worst place to be while thinking about a sell, is when you are burnt out mentally, physically, and sometimes even financially.

This will blind your judgement and emotionally exhaust you before you even begin the process.

Why? Because not all buyers are created equal.

Some will protect what you built, grow your company, and take care of your employees.

Others will gut it for parts, slash costs, and destroy your legacy.

And most sellers don’t realize this until it’s too late.

The reality? If you've been following us and read our previous blog, you would know:

Most businesses don’t sell—and those that do often go for far less than owners expect.

• Only 20-30% of businesses listed for sale actually close (IBBA Market Pulse Report).

• Over 50% of deals fall apart in due diligence—bad buyers, bad terms, bad planning (Exit Planning Institute).

• Many sellers leave 30-50% of their business’s value on the table simply because they didn’t structure the right deal.

  
  

You need to vet your buyers the same way they’re vetting you—because the wrong deal can cost you everything.

The 3 Types of Buyers (And Who You Actually Want)

1. The Strategic Buyer – Your Best-Case Scenario

A strategic buyer is another business that wants to buy and integrate your company into their operations.

They’re in your industry, and they see your business as an opportunity to expand their reach, service offerings, or market share.

✔️ Typically pay the most fair to the highest price because they see long-term value

✔️ Want operational synergies, which can lower costs and increase profits

✔️ More likely to retain your employees and existing brand

Example: A regional HVAC company acquires a smaller competitor to expand into new territories. They keep the existing brand and employees but streamline operations to improve efficiency.

What to Watch For: Some "strategic buyers" only care about your customer list. If they don’t value your team, they may strip your business down and merge it into theirs.

2. The Private Equity Buyer – High Offers, But Strings Attached

Private equity (PE) firms are financial buyers. They’re not in your industry—they’re looking at numbers, profit margins, and scalability. Their goal is to buy businesses, increase efficiency, and sell them later for a higher price.

✔️ Often willing to pay a premium if your business is profitable and growing

✔️ Can provide capital and expertise to fuel expansion

✔️ May allow you to stay on for a period if you want to be involved in the next phase of growth

Example: A private equity firm acquires multiple plumbing businesses and rolls them into a larger company to create a dominant regional provider. They improve management, centralize back-office functions, and position the business for a larger future sale.

What to Watch For: Many PE deals come with earnouts—meaning you won’t get all your money upfront. Instead, you have to hit certain performance targets to receive the full payout. If you’re looking for a clean exit, PE firms may not be your best bet.

3. The ‘Bad Buyer’ (Time-Waster or Asset Stripper) – Run. Fast.

These buyers don’t have two pennies to rub together, the experience, or the long-term vision to make your business successful. (Might sound like the parrots regurgitating "no money down" sales tactics they learned from social media.)

They might offer you a deal that looks good on paper, but once you dig deeper, you realize it’s built on empty promises and risky terms.

Warning Signs:

❌ Wants only seller financing or “creative” deals with little to no money upfront

❌ Can’t provide proof of funds, a transition plan or a credible growth partners with a proven track record (biggest red flag)

❌ Offers look high, but they’re structured so you get paid over many years—if the business survives

Example: A "buyer" offers you full price but then pushes for a 90% seller-financed deal, meaning they’ll pay you slowly over time. If they mismanage the business and revenue drops, you stop getting paid.

Lesson here is: If the buyer has no skin in the game or a licensed QE as an operator, they have no reason to keep your business running successfully.

Creative Financing: The Good, The Bad & The Ugly

Some buyers—especially smaller ones—can’t afford a 100% cash deal. That’s where creative financing comes in.

But not all creative deals are smart deals.

Let’s break it down:

The Good: When Creative Financing Works

Creative deal structures aren’t always bad.

In fact, we are a huge fan when done right, they allow sellers to get a better deal while buyers get access to a good business, while minimizing their upfront risk.

✅ Seller Financing (Smart Terms) – The seller carries a portion of the note with interest, ensuring they still get paid while making it easier for the buyer to purchase the business.

✅ Earnouts (Tied to Growth, Not Survival) – If revenue grows past a certain point, the seller gets bonus payouts. This should be extra money, not the majority of the deal.

✅ Equity Retention (Minority Stake Deals) – The seller keeps 10-20% ownership, allowing them to cash out again later when the company grows.

Example: A plumbing business owner sells 80% of the company for $5M, keeping a 20% stake. Five years later, when the company sells for $30M, the seller’s 20% turns into another $6M payday.

When It Works Best:

✔️ The buyer has experience growing businesses

✔️ The seller has leverage and strong legal protections

✔️ The business has consistent, predictable cash flow

The Bad: When Creative Financing Is a Disaster

These are the deals that sound "too good to be true" but leave the seller screwed.

❌ Earnouts Based on “Hopes” – If the business doesn’t hit growth targets, you don’t get paid.

❌ Seller Financing Without Protections – If the buyer stops making payments, you get your business back—but in worse shape.

❌ No Money Down Buyers – If a buyer can’t put at least 10-20% down, they’re can strip the business and run.

Example: A seller finances 80% of the deal, expecting payments over five years. The buyer mismanages the business, revenue drops, and they stop paying. The seller is left with nothing.

How to Protect Yourself (not LEGAL advice).

✔️ Require a personal guarantee (this is optional because you become the bank, so your call). If the buyer defaults, you at least take their assets, not just a lawsuit.

✔️ Demand a down payment. If they can’t put real cash on the table, they shouldn’t be buying your business. (Unless you are apart of a Leveraged Buy Out, more on this later).

✔️ Structure earnouts smartly. Tie them to actual growth, not just revenue staying flat.

✔️ Get professional advisors. The wrong tax structure can cost you six or seven figures.

Who You Sell to Determines What Happens Next

✅ The right buyer grows what you built.

❌ The wrong buyer dismantles it.

Of course, not all buyers fit neatly into these categories.

Some have a mix of these characteristics, and every deal has its own nuances.

The only way to truly know who you’re dealing with is through experience—or working with someone who’s been in the trenches and seen how these deals play out.

Most sellers focus only on price—but the real question is, who do you trust with your business?

If you’re even thinking about selling in the next 1-3 years, the time to start preparing is now.