When it comes time to sell your business, you look for someone who is willing to pay a fair price for the company you built and to put in the hard work it takes to make the business thrive. However, to find the best person to take over for you, it’s important to put yourself in their shoes and understand how they evaluate a business. Continue reading for a few tips on how to think like a buyer when selling your business.
Cost and Terms
There are many different types of buyers, but they all will consider how much they’ll invest to acquire a business and the potential return on their investment. The first area a buyer will evaluate is the cost and terms- including how much debt they will take on and if the deal’s terms and conditions are worth the purchase.
All buyers will look at the amount of cash required to make the deal. As a seller, you can make your company more attractive to buyers by decreasing the cash requirement and increasing the acceptable dept portion. This tactic may even raise your selling price.
A buyer will also think about if the business will continue to operate similarly after the sale, including if the staff is willing to stay with the company, if the owner has personal relationships with customers or vendors that will be difficult to maintain, or if the owner has special skills that are necessary but challenging to learn. Before selling your business, it’s crucial to know that all buyers will have these concerns, so you should be ready to provide solid responses. If a seller feels confident that the business can transition smoothly and operate similarly after a sale, they will be much more willing to purchase.
A buyer will look for a business that can continue to grow, rather than a company that has already maximized their opportunities. If your business started small and focused on one geographic region, a seller will see this as an opportunity to expand and take the product national- or even international. This is an important fact to advertise to potential buyers, as they may pay more for a business if they believe they can increase revenues.
Sell With Atlantic Business Brokerage, Inc.
At Atlantic Business Brokerage, our mission is quite simple; we help sellers sell businesses, and buyers buy businesses! Over the past 30 years, ABBI has facilitated the sale of countless commercial properties, businesses, and franchised locations. With our unparalleled knowledge of the business purchase and sale industry and our network of contacts, we offer services to both buyers and sellers that no other brokerage firm can match.