There are two general classes of buyers for a business: internal and external. Internal buyers would be one or more key managers who could provide succession leadership. External buyers would be third parties including of course complementary vendors. 

Internal Options:

By having the capability to lead and to generate the cash flow from the business to purchase a portion or all of the business, key managers can qualify as a Buy-in or Buy-out Succession Bridge. However, rarely do key managers have the immediate cash or credit for outright purchase because, if they did, in most cases they would have opted out earlier to do their own thing. The motivation for you to consider a key manager with a buy-in, or even a buy-you-out option, is that their services comprise a significant part of the business value. They respect the existing culture and family members, and represent greater cash flow to the seller from an incremental sale versus an outright sale.

External Options:

A good external buyer is one who has no prior management or ownership connection with your business and who is financially and culturally compatible. 
Financial compatibility is simple: we don’t know you, so this will need to be a cash deal. The cultural compatibility is more challenging because, if senior manager are going to work hard to optimize business value, they will want to be involved to some degree in the selection of who will be their next boss. This is an important subject to the external buyers too because even if you have a unique process, product or franchise, the new buyers will be relying upon the existing managers and employees to help them realize the desired return on their investment. Many businesses have sold for less money to buyers who had convinced everyone that they planned to maintain the management culture and loyal employees. Of course, some changes were made but as opposed to moving all management decisions out of town, remaining locally owned and operated was a clear advantage for the purchaser.

The sale of a business is a viable succession option.

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