Who Is the Best Buyer for Your Business?

In our Value Builder series we explore the eight key factors potential buyers review when looking to acquire a business – maybe yours

Who Is the Best Buyer for Your Business?

Determining the best buyer for your business is not always a cut and dried proposition. Sure, you can line up buyers, but if you really want to find the right buyer who offers top dollar for your company, then you need to understand not only the value of your business and how to maximize it, but also the value your best potential buyers see for investing in your company.

Knowing your buyer helps you to understand what they value and how to increase your company’s worth. Here’s how to educate yourself on each type of buyer as you prepare to sell your company:

Understand Potential Buyers’ Profiles and Reasons for Buying

Buyers purchase companies for many of the same reasons you want to sell. They want to make a good business deal and are looking for something new – and something profitable. While a big payday is on many sellers’ minds, there are many other things you need to consider when assessing potential buyers for your business. Here are some things to keep in mind when assessing the fit of a potential buyer:

• Financial resources
• Desire to buy and run a company
• The need to buy a company
• Business and industry knowledge
• Experience and skill to grow and lead the company
• Authority and power to make decisions autonomously
• Why they are interested in purchasing your company

Understand What Potential Buyers Want to Know About Your Company

Serious buyers will take a detailed look at:

• Selling price
• Industry opportunities – where is the industry headed? Is it in good shape?
• Financials – cash flow, debt, inventory, sales forecasts, discretionary costs
• Transition plan – are you willing to aid in the ownership transition process?
• Opportunities to grow the business
• Key differentiators
• Government and legal issues/concerns

Understand Your Business from a Potential Buyer’s Perspective

The more you can uncover about the motives and reasons for a potential buyer’s interest in your company, the better you will be able to assess their fit as being the “right buyer.” Understanding what they are looking for and the value they see in your company is the key to maximizing the value of your company.

Increasing the value of your business cannot happen overnight. If you are thinking about selling in the near future, then you need to start working on your transition plan now if you want to find the right buyer in the future and maximize the amount they would be willing to pay you.

The complimentary Value Builder questionnaire available from The Osborne Group is an excellent way to start the process of increasing the value of your company before selling. The answers to the questionnaire lead to an assessment of the potential sales value of the company in question. The questionnaire was developed by internationally recognized small business expert John Warrillow, and gives results based on findings from over 17,000 companies. Your answers will help determine what drives up, or undermines, your company’s value and steps you could take to increase its value.

To find out how your company is performing, click here to take the Value Builder questionnaire: http://www.thevaluebuildersystem.com/osborne-group

In our upcoming blogs, we’ll examine other Value Builder factors and their impact on your company’s worth. Follow us here for the series:

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