Horton Business Group

     Experts at Buying and Selling Businesses

  
 Office 941-735-8830 
 FAX   941-827-2966
 hortonbrokers@aol.com

What buyers are looking for 

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Knowing what buyer’s are looking for is critical to selling your business. It is like running your business, by understanding your customers and your product or service to meet their needs you have succeeded in business. The same holds true for selling your company. 

First of all, remember that you are selling your business. Your buyer is looking to buy your business. They are not buying you.  In this regard, you must communicate the perception that the business can be run without you. If this is not the case then you must offer solutions on how it can. This is one of the most important sales principles in selling your business. Buyers are looking to buy businesses that don’t depend on the owner. 

As a corollary to this, buyer’s want businesses that are fully staffed and managed without the owner or minimal owner participation. In addition, buyer's want an owner is willing to transition stay and help the buyer learn the business.  You must be willing to stay on for a sufficient period of time for this to transpire. 

Be flexible on deal structure, at the same time be creative and open minded. Many sellers begin my demanding a cash deal. While this may happen, the statistics show that most transactions are more complex than a simple cash deal. 

Buyers want a company with a good cash flow. Many times companies have this but because of the accounting, it is not obvious. It is important to demonstrate through good accounting how much profit the company makes. Many times due to tax avoidance, the accounting does not reflect true profits received by the owner. 

Your company must contain capacity for growth. The buyer must perceive the ability to grow the business.  Typically, this is one of the main reasons the buyer is pursuing acquisition of a selected company. 

The owner must communicate a good reason for selling. Reasons such as retirement and  health are common. Many owners sell because they are ready to do something else. Whatever, reason the buyer must be given the confidence that this is a successful business that can be grown. 

It is important that the buyer believes the company is a manageable risk opportunity. Every business contains some level of business and financial risk. The key is that this risk must be manageable and something the buyer can live with.

The buyer must perceive that the business is systemized, that the success of the company is due to the owner creating a system for dealing with customers, managing the employees and their products. A systematic process insures that success is repeatable each day and when the owner leaves the business, the capability for success has not walked out the door.