If you are thinking about selling your business, first put yourself in the shoes of a buyer.
Here are a few things that might be important to you as a buyer:
A buyer will want to be sure that what they are investing in will grow and blossom with their help or at the very least, maintain a steady income year over year.
How much does the business depend on you? If the business can only be run with your knowledge and expertise, or that of a manager or employee that may not continue once the business is sold, that will limit the size of the buyer pool to someone with your exact same skill sets.
Stability is another major factor for which buyers are looking. A business that relies on only one or two main customers to keep the doors open is a big risk. A buyer may be wary of the possibility of losing a key customer and, essentially, the business they’ve acquired. A broad customer base is more stable and, therefore, viewed as safer. No single customer should be more than 20% of sales.
Obviously, profits and growth are very important. If the business isn’t profitable it doesn’t look like a very smart purchase. Most buyers aren’t looking to buy a project unless the price is right. A business with profit and growth is viewed as having less risk and will be easier to market and sell if it is priced properly.
When you do feel ready to take the next step and put your business on the market, highlight the good qualities, but don’t try to hide anything that might not seem perfect. Transparency and honesty are necessary when selling a business.
About the Author: Richard Roberts is the Managing Broker at AEGIS Business Brokers, LLC
He is an active member of the IBBA International Business Brokers Association where he holds their top rating of CBI Certified Business Intermediary and the ABBA American Business Broker Association where he received his ABI Accredited Business Intermediary & SVA Senior Valuation Analyst Certifications.
You can reach Richard at firstname.lastname@example.org or 479.689.4455 Ext 11