More investors than ever before are eager to buy reputable, high-performing businesses with proven records of success. But what’s attracting these business buyers?
Surprisingly, it’s not only the industry a business serves, the market it supports, or the projections that it can make for future years. Buyers are also looking for transparency, organization, and clarity in the numbers, structure, and data of the businesses that are up for sale.
There are six things you need to meet those objectives and help business buyers make fast, informed decisions about your business—decisions that will help you secure offers from those buyers. Let’s dive in.
Gather the financial statements and documents buyers will want to study before making an offer for your business. Have them reviewed by a third-party accounting firm to ensure their accuracy.
The documents you should gather include:
Need help finding an accounting firm? Check out these options:
A fair valuation.
Work with a business brokerage firm or third-party valuation specialist to secure a fair valuation range for your business. Your tax returns, profit-and-loss statements, and balance sheet information will all play a part in establishing a fair valuation.
Ready to connect with a broker or valuation specialist? Start your search here:
An organized compilation of your business’s critical documents.
Create an easy-to-access file structure that includes your articles of incorporation, proof of business insurance, licensing agreements, leases, permits, vendor contracts, and customer contracts for potential buyers to review and assess. You should also consider including documents that describe your policies and strategic plans for operations, customer acquisition, growth, retention, and fending off competition.
A sound understanding of the reputation of your business.
Compile a list of your current customer disputes, legal and regulatory concerns, negative reviews, and testimonials. Be prepared to account for each concern and the courses of action you’ve taken to remediate and restore your reputation.
A compelling story.
Think about how you can tell the story of your business to prospective buyers so that they can understand your vision, the courses of action you’ve chosen, and the opportunities that’ll continue to be available after the sale of your business.
A plan for assisting post-sale.
Determine how long you’ll be willing to advise the new business owner after the sale of your business. Many new owners will appreciate the promise of a brief commitment to answer unforeseen questions, provide assurance to employees and customers, and ease the hardships of the transition.
Once the elements that will help you secure offers from buyers are in place, you can decide whether you want to work with a business broker or try to sell your business on your own.
Read this guide to assess the pros and cons of each option:
Then, log into your owner’s portal for free articles, resources, and advice that’ll help you prepare for the steps you’ll need to take to position your business, secure offers from buyers, and negotiate your sale.