June 4, 2020  
 
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Attracting Potential Business Acquirers

 

How Your Company Name Can Impact Your Exit Strategy

What does it take to attract business acquirers to buy my business? If that's on your mind, you might be surprised to learn that changing your company name could be a smart move.

It's never too soon to start thinking about an exit strategy.

Many business owners incorporate an exit strategy into their initial business plan and carefully execute their strategy throughout the duration of their time with the business. Subsequently, when it's time to retire or move on to the next business, the owner has positioned himself to reap maximum profits on the sale.

But even the most thoughtful exit strategies may be need to revised in the years or months leading up to the owner's exit. In fact, your company name is a perfect example of something that may need to be tweaked before you list your company in the business-for-sale marketplace.

Does your company's name really make a difference? Absolutely, especially when it comes to attracting the attention of an acquirer, business broker, or investment banker. The hard truth is that there are thousands of available companies in the marketplace and getting your company on the most qualified buyers' radar isn't easy.

Your company name plays an important role in attracting the right buyers. Here are some of the reasons why it may be necessary to adapt your name and brand before you sell the business.

Keyword-Friendliness

Brokers and investment bankers rely on companies like Experian, Axciom, D&B, and Hoover's to provide them with lists of acquisition targets. These companies filter targets according to a range of criteria including geography, SIC code, and revenues. However, the filtering process still leaves a large list of potential acquisitions. So the final filter is often a simple keyword search. To increase your visibility, consider changing your company name to something that contains searchable, keywords. For example, let's say your tree-trimming business is currently named Edgewood. By changing the name to Edgewood Tree Company, you can improve your ranking in an acquisition-targeted keyword search.

Broader Focus

Another effective strategy is to change your company's name to include a broader range of business activities. From an acquisition perspective, minimalist company names translate into a perception of limited business activities and fewer possibilities for buyers. Going back to the previous example, Edgewood Tree Company could be changed to Edgewood Tree & Landscape to encompass a wider range of business activities.

Owner-Generic Branding

Your brand can be a potentially valuable asset during the valuation process. But if your brand is closely tied to the current owner, its value may be negligible, no matter how much recognition it has with consumers. That means Edgewood Tree & Landscape is a much better name than Ray Smith's Tree & Landscape.

Related Articles

Want to learn more about this topic? If so, you will enjoy these articles:

Joining a Trade Association to Attract an Acquirer
Attracting Acquirers With Good PR


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