Five Types of Buyers

Buyers are typically grouped into the following categories, though in practice most buyers fall into more than one.

The Individual BuyerThis buyer is usually a financially capable individual with the background or experience needed to lead a particular business. They look for a company that is stable and profitable, ensuring a strong return on both their investment of capital and their time.

The Strategic BuyerA strategic buyer is almost always a company pursuing a specific objective. Their goals often include entering new markets, expanding market share, acquiring new technology, or reducing competition.

The Synergistic BuyerLike the strategic buyer, this category is usually made up of companies. Synergistic buyers seek businesses where the combined value of both entities will exceed the sum of their separate parts, creating measurable growth and efficiency.

The Industry BuyerThis is often a competitor or similar business already familiar with the industry. Because they already possess market knowledge and expertise, they are less inclined to pay a premium for the seller’s know-how.

The Financial BuyerFinancial buyers focus primarily on return on investment. They are driven by measurable financial performance and their ability to finance as much of the purchase price as possible.

While smaller businesses are most often acquired by individual buyers, it is important to recognize that many buyers overlap categories, blending motivations and strategies when pursuing a purchase.