Make Your Business More Appealing to Buyers

Factors to Consider

The majority of  people who buy a main street business are first time buyers.   With this in mind, we recommend preparing your business in a way that makes a future ownership transition seem easy.  First time buyers worry about whether a business will continue to succeed after the seller is gone.  

Are you, the seller, key to all its success?  That answer should be a hard “No!”    It should be obvious to them that they can stepping right into the business without disrupting customer relationships.  They should be able to understand  the general flow of operations and that they don’t depend entirely upon you.  

A business that is truly “turn-key” demands a higher price and sells much faster than one that seems complicated to a first time buyer. Here are some measures you should consider:

1. Automate Processes

Automate as many processes as you can.  Document the workflows and keep that documentation updated.  It will help with your workflows and those of a future buyer.  It will also make buyers feel less intimidated about taking over. 

2. Establish a Chain of Command

Key employees are everything, and having a second in command is critical.  Having even one competent employee that a future buyer can depend upon is tremendously attractive to buyers. If you don’t have that person in place, hire one or start preparing an employee who shows ability for this role.  Your entire staff  should be well-trained and any HR issues are resolved before you go to market.  We also recommend having a clear chain of command and employee handbooks in place.  This is a must for businesses with more than five employees, but a best practice no matter how small your staff.

3. Evaluate Vendor and Customer Relationships 

You should always be evaluating  vendor and key customer relationships. Having a good relationship with key vendors is mandatory, but do you have more than one source for supplies?  Having several suppliers promotes competition, ensures that supply chain will not be interrupted and helps keep your cost of goods in check.  The same principal applies to customers.  Having a really good customer or large contacts with a few key customers is great.  But, businesses that are dependent upon any one customer for 10% or more of  their gross sales are a greater risk for a buyer.  If that one customer “abandons ship,” it can really hurt the bottom line.  

 We can help advise you  in a wide variety of ways long before you are  ready to sell.  We  maintain confidentiality at all times. When you begin working with us well in advance of a prospective sale, we can assess the particulars of your business.  Our Advisors will provide valuable insight that will make your business more attractive to buyers. 

Copyright: Business Brokers & Consultants, Inc.