The science of selling a business can appear daunting, especially when it is your first time. However, understanding why some businesses sell, while others do not, can help prepare you for your turn. From financial statements to listing price, every aspect of your business will be seen under a microscope before a buyer is willing to make a major investment. To fully grasp whether or not your business is ready to be listed, consider these 5 reasons why some businesses sell and others don’t.
1. Financial Statements
A business that cannot appropriately show a balanced sheet and a constant flow of profit is unlikely to be found attractive to a prospective buyer. The key to selling is being able to show a tax return with profit and an organized flow of incoming and outgoing financials.
2. Consistent Increase in Revenue
In addition to credible financial statements, a prospective buyer will want to see stable and consistent growth in revenue, earnings, and profits. This kind of stability is attractive to a prospective buyer who will not feel like an exorbitant amount of work will need to be done to make your business successful after ownership is transitioned.
3. Current Ownership and Management
If the success of your business is directly tied to your name and your management style, then a buyer is not likely to make an offer. A prospective buyer wants to feel confident that your business can stand alone (without you) because the services and products can speak for themselves. In fact, they need to know that customer loyalty is tied to the product and not the owner.
4. Financing Opportunities
Offering reliable financing opportunities is an attractive quality for a business for sale. Experienced business advisors are able to assist you and a prospective buyer with the necessary information for small business loans and financing. When a business cannot offer anything of the sort, a prospective buyer may look elsewhere.
5. Listing Price
A prospective buyer wants to see a competitive listing price – selling your business for too little or too much can be a major turnoff. Business advisors are equipped to assist you in determining your business’s value and the appropriate listing price. If you list it too low, a prospective buyer may think you are trying to get out quickly to avoid a major loss in revenue, while listing it for too much is unlikely to attract anyone at all.
If the time to sell your business is coming, you will want to be prepared. There is no better way to prepare for this than to ask questions of someone who is experienced in the process of selling businesses. Transworld Business Advisors of Houston has 15,000 local buyers and are experienced at selling businesses in every industry. Seek the professional expertise of a broker at Transworld Business Advisors Houston today; contact us to schedule a consultation.