How To Find Strategic Buyers For Your B2B Hi-tech Industrial or Engineering Business

You have the skills to do this for yourself

The goal of proactive selling is to find a buyer who values your business more highly than the typical accounting multiples (these multiples result in the so-called Fair Market Value). In this article, I will explain some of the methods I use to do this, and you can then do it for yourself.

You have the skills to do this yourself - your analytical skills and business nous. What you may not have is the time. In my experience, the effort required to get a business sale-ready consumes a large part of the owner's attention. If you do have the time, here's what to do.

Proactive selling requires that you fully understand your own business's features and advantages and how these combine into sustainable competitive advantages. You also need to know how these translate into benefits and then value for your customers. This (quite challenging) work is all in the context of the "eyes of the customer".

However, a buyer will not determine your businesses' strategic value through the "eyes of the customer". The value you are delivering to your customers is simply a hygiene factor for a strategic buyer. As a seller, your lens is the "eyes of the buyer".

Related: Your Company May Have Value But Your Buyer Cannot See It. Here's Why And What To Do

View your sustainable competitive advantages through the lens of the buyer

Once you have identified your sustainable competitive advantages, you then need to find buyers who could leverage these advantages the most. In essence, you are asking yourself, "who could get more from our assets and sustainable competitive advantages than we can?".

Your knowledge of the industry is a great place to start, and that industry knowledge will generally be far greater than mine. It may be that one of your key suppliers would love to own your business. However, in my experience, the best strategic buyers are often on the edge of the "traditional" industry knowledge. We have to discover these buyers.

The typical ways to search for buyers is to use credible business directories such as Dunn & Bradstreet, Bloomberg, or Owler. If your company has an entry in one of these directories, they will generally show a list of "competitors". 

However, there are limitations inherent in these business directory services, namely:

1. Smaller Australian firms, e.g. less than 400 people, are often not listed.
2. The "competitor" lists reflect crude metadata such as industry and keyword descriptions of services.
3. The ultimate goal of these services is to get you to subscribe. They feed you crumbs to lead you down that funnel, and at the end of the day, without subscribing, you are wasting your time.

Online SEO tools are my preference

I prefer to use search tools. SEO tools will provide Google's view of your competitors in the context of your website and the keywords driving people to your business. From this, you can review which competitors are possibly strategy buyers.

For example, free tools (limited daily searches) like SEMrush or UberSuggest will list the keywords your site ranks for in organic search. If your site ranks best for "warehouse lighting control systems" then google this to display a list of competitors. As you work through this list you may find that some of these "competitors" may be potential strategic buyers.

Check the "People also ask" box displayed by Google to see which sites have the best related-information about warehouse lighting control systems. These sites may also be leads for strategic buyers.

Next, check the "Related searches" box at the bottom. Pick out search terms that could lead you to interesting sites, such as "disadvantages of lighting control systems". If your business solves these problems, then the sites mentioning disadvantages could be selling something complementary, and one plus one equals three.

Finally, expand on the initial search phrase, e.g. "warehouse lighting control systems" with terms reflecting potential new markets and strategic buyers, for example:

• "horticultural lighting control systems".
• "mining haul road lighting control systems".
• "intelligent industrial lighting solutions".
• "safety and intelligent warehouse lighting control systems".

I also use paid SEO tools. I enter keywords that best describe the features, advantages and benefits of my client's solution, plus extensions and aspirations. The tools identify the top ranking sites in any geography for those keywords (and show how my client's site compares).

Other online tools reveal to me the competitors (and adjacent firms) with the best-structured content and the "highest number of commercial factors", e.g. images, videos, contact forms, feedback, social links, buy buttons, comparisons, etc.

Refine the quality of the list through visiting each site and assessing their About, case studies, management team, technical team, the quality of the content and what appears to be their intent. Ultimately, your most important filter is whether or not you can envisage the possibility of 1 + 1 = 3.

Now you have an initial list, for further research

From the above research, you will develop an initial list of, say, 20 companies that may lead you to a strategic buyer. Now, go to the Linkedin Company Pages of those companies:

1. Review the description, posts, people and their website (as described in the previous section). Review the profiles of the management team and their background. Decide whether to keep them on your list, or not. Again, you are looking for 1 + 1 = 3.
2. Then, use the "Pages people also viewed ... see all similar pages" section to review related companies in the same way as I described above.

Now you will have a list of candidates. You may have to do this for each category of strategic buyer, e.g. whether a market extension or a service transformation or technology leverage. 

Not the time to rush off to contact potential buyers - here's what to do next

Don't get excited and rush to contact those on your list.

The next step is to reshape your assets and sustainable competitive advantages into sets of case studies. Each set of case studies is relevant to a set of strategic buyers. The purpose of the case studies is to communicate the strategic value of your business to the buyer. 

You will use these case studies to capture the buyer's attention from the first contact. The case studies need to be as good as you can make them without over-thinking them. Only the buyer knows the real value you represent.

The purpose of the case study is to qualify the buyer, commit to further discussions, and create some enthusiasm.

You have your list of potential strategic buyers of your business

By following the process above - online research, LinkedIn research, and proficient case study preparation and communication - you will end up with a practical list of potential strategic buyers of your business.

Remember, the time to contact buyers is after you have audited and sorted out your governance issues and your resources and capabilities needed to manage a sale or merger.

Good luck.

Related: Finding a Strategic Buyer For Your Business Isn't Rocket Science

Any questions? Comment below or message me.