Will Your Business Sell?

Is Your Business Marketable?

Specifically, there are a few key factors as to why a business doesn’t sell or take steep discount to sell. The key factors include:

1. Key-man Risk

Is the success of the business reliant on the owner or has responsibility for operations been delegated to multiple employees? Typically, businesses that are heavily reliant on the owner are less marketable and more difficult to sell because buyers are concerned that the business will decline once the owner sells the business.

2. Financials

Clean and organized books and records – Buyers ask for numbers first. Cleaner and more organized, quicker verify cash flow and write check. Buyers typically request to review that last 3 years of profit & loss statements and a recent balance sheet. If your business has multiple locations, buyers will be interested in reviewing financials for each store location.

3. Growth potential

Consistent historical growth and being positioned for future growth – Being able to show year-over-year growth and continually implementing growth strategies so you are positioned for future growth adds value.

4. Scalability

Can you grow your product or service offerings, without significant investment of time or money? It’s important that the infrastructure in place is scalable, such as the manpower and the required assets are in place.

By evaluating your business early on, you can take steps to tackle these issues before selling your business and maximize your overall payout!