How To Make Your Business More Saleable

If you are thinking about putting your business on the market or you currently have it on the market, here are a few tips that can help to get someone to see your business as more attractive than other businesses in the market. The key is putting your business in the best possible position to have someone “buy it”. In order to do that you need to look at the transaction from the Buyers perspective. Put yourself in their shoes and say: “If I was buying a business, what is it that I would want to get out of it?” Among other things, there are 3 questions that the buyer wants answered:

1. Is the business making any money?

2. What is the likelihood of that continuing if I buy the business?

3. How can I grow it to make a capital gain?

If you can answer these questions, you can put your business ahead of hundreds of businesses in the market. The first question is answered by looking at the history of the business. If your business is making money make sure you can prove it with your accountants prepared Profit & Loss Statements (3 years statements is a minimum requirement). Don’t think that a buyer will take MYOB, or other accounting software, figures because they won’t.

As far as the second question goes, the Buyer will have a concern that after buying the business, you will walk away with all the information required to ensure the success of the business, in your head. You can eliminate this by putting in place systems and Procedure Manuals for all areas of your business. These are the “how to” and step by step instructions to successfully run the business without you. The history also plays a role in answering this question. Although there are no guarantees, by looking at the past we can get a good idea of the future. For example, has the revenue or net profit been declining or increasing over the last 3 years? What are the factors contributing to these events?

The third question is a little bit harder to answer as it may depend on the Buyers ability and skill level to grow the business. However, if you have a good, well structured and easy to follow Business Plan, this can be the road map to growing the business. The more detailed the Business Plan the better, i.e. a one year, three year and five year plan. If the Buyer can see your own personal plans and goals for the growth of the business, it will instil in them the confidence to take the reigns and continue on with your plans.

So take the time to step away from your business as the Director or CEO and put on those Buyers shoes. You may find that there are areas that can be improved and will add value to your business or at least make it more appealing to more Buyers.

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Jean-Pierre de Mezieres