As a business broker, I like to hear that a business owner is taking a vacation. My prospective buyers like to hear it too.
When a business owner is able to take a vacation, it’s a good sign that there’s infrastructure in place. That links directly to the health of the business and the health of the owner. A buyer is looking for a good lifestyle. Who wants to take on a business where the owner works 12 hours a day, 7 days a week? No one craves burnout, and without a vacation, that becomes a very real possibility.
While my typical business buyers aren’t planning to be absentee owners, they do like to see that a company has employees and systems in place to keep the business running smoothly when the owner’s away for awhile.
What buyers expect to see
When we’re talking about “main street” business sales – usually companies with EBITDA below $1 million, buyers are typically looking to be full time owner/operators. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is used as an indicator of a company’s financial performance and earning potential. Buyers who are looking for companies above this range expect to see extensive staff, including managers, in place.
The real value of a small or “main street” business are the employees that will stay. Those employees, however, need to also be familiar with the systems and management tools the business uses, and understand how to interact with customers and vendors in the owner’s absence.
I saw a recent example of a prospective buyer of a manufacturing company who didn’t move forward with a business purchase. Although this buyer was prepared to work hard as an owner, when he looked more closely, he saw that there didn’t seem to be a lot of structure in place, and the owner was working long hours. That was overwhelming to the potential buyer.
One of the questions business sellers can expect to be asked by a buyer is: “What does a typical day look like for you in your business?” The buyer wants to know what jobs the owner is doing and which jobs are being delegated. Is the owner doing what he or she is best at and giving responsibility to others to handle the day-to-day operations? The potential new owner likes to be able to isolate the specific role or roles the owner has and understand how much time is spent performing those roles.
The value of a business coach
If you are thinking of selling your small business in Jacksonville and you haven’t taken a vacation in a while, it might be time to ask why. I often recommend a small business owner work with a business coach if they haven’t already. A business coach can help you take your business to the next level so that you CAN take a vacation.
I like to quote Jacksonville-based business coach Steve Goranson, who asserts that “You should be working ON your business, not working IN your business.” Steve recently told me how pleased he was that some of the business partners he had coached were able to take vacations together recently, because of the systems and strategies they developed.
In my 11 years of experience as a business broker, I have developed a wealth of resources, including several business coaches, that I am happy to refer prospective sellers to. When you get your business set up so it can run without you for awhile, you’re more likely to attract a buyer.
Experience is key. The best business broker can walk you through the issues and concerns you may have when you are ready to sell your business. Since I have been both a seller and a buyer of businesses, I have a unique perspective. I know the roadblocks and potholes that can stall a business deal from either side, and I know how to navigate complex selling and buying situations. My association with Transworld Business Advisors, the world leader in the marketing and sale of businesses, provides access to a wealth of resources.
I welcome you to contact me to schedule a free and confidential evaluation, whether you are thinking about selling your business now or are building an exit strategy for the future. I’ll be happy to answer your questions and help you learn more about hiring a business broker to sell your business.
Senior Business Broker, Certified Business Intermediary (CBI), Board Certified Intermediary (BCI)
Transworld Business Advisors
Member, Business Brokers of Florida
Certified Business Intermediary (CBI), International Business Brokers Association
Transworld Highest Dollar-Volume Award Recipient 2014 and 2015