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Understanding “teasers” when buying (or selling) a business

A “teaser” is one of the key tools in marketing a business for sale. Like a trailer for a movie or the blurb on the back of a book, a teaser is designed to catch the interest of potential buyers – without revealing too much.

A teaser is a concise document, just a few pages long, that is designed to introduce the business to potential buyers. A well-crafted teaser gives a succinct overview of the business (without naming names) and industry, some high-level financial metrics that illustrate its current level of success and potential for growth and a general reason for the sale.

Why bother with a teaser instead of just advertising the sale?

Businesses put out teasers instead of directly advertising that they are for sale for several strategic reasons. While it might seem counterintuitive not to openly advertise a business for sale, using teasers is a calculated approach. It helps:

  • Maintain confidentiality: If the word gets out that a business is for sale, the uncertainty about the company’s future can cause the rumor mill to go into overdrive, and that can negatively impact the company’s operations (and profits) before a buyer is even found.
  • Find qualified buyers: Teasers are widely used as the first step when it’s time to sell a business because they help separate serious buyers from everybody else. By providing just enough information that buyers can tell if they’ve got the resources and industry experience to move forward, the seller saves time before doing more focused marketing.
  • Maintain a competitive advantage: When a business is openly for sale, both competitors and buyers may sense some urgency – and that can weaken the seller’s negotiating power.

Buying or selling a business requires a multifaceted approach and a lot of careful planning. It’s also a game of strategy. Neither buyer nor seller wants to put all their cards on the table too soon. Whether you’re buying or selling, legal guidance can help you protect your interests.