Selling a Privately Owned Business – Briefing 3 – Key Buyer Issues
Our third briefing in this series dealing with the sale of an entrepreneurial private business covers some key buyer issues, in advance of future briefings which will look at the actual process.
At this point you’ll have considered your objectives, you’ve carried out some initial planning and grooming of the business and are ready to go!
Before embarking on the final decision, what factors might be important in the market to potential buyers? From our long experience over many deals we’ve devised an informal check list of ten key points which any buyer will look for.
1. Positive trading and profit trends and evidence of future sustainability of trading.
2. No reliance on you as outgoing owner.
3. By extension, good quality second tier or support management in place.
4. Good prospects for future growth, especially known unrealised potential.
5. A stable growing and well spread customer base.
6. Good markets with growth potential, especially if they are “niche” markets.
7. That your business has a demonstrable competitive edge, differentiation, or “USP’s”.
8. Proprietary products or services, brands, licences or patents are always attractive.
9. A genuine reason for sale, in particular that it is not a forced sale.
10. No adverse external factors outside an owner’s control.
It obviously isn’t necessary to tick every one of these boxes, but the more of these key factors your business possesses, the better chance of achieving your objective of maximum value on the sale.
20 July 2018