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I'm Selling my Business... But What do Buyers Want?
| Guest post by: Rob Keating |
Article Overview: If you are thinking of placing your business for sale, it makes sense to present it in a way that will make it be more attractive to potential buyers, thereby maximising its value. If time is a luxury that you have prior to putting your business on the market, then use it wisely and prepare well for the future sale.
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Free Download - Who is Going to Buy Your Business? By Rob Keating |
I'm Selling my Business... But What do Buyers Want?
First impressions count, so if any area of your business premises is looking neglected, now is the time to sharpen it up and re-paint or redecorate as required. This includes cleaning plant and checking any outstanding maintenance work is carried out.
Sell or dispose of any obsolete assets and stock that are not essential to the running of the business. This helps keep the sale price down and provides a return on dated or surplus stock or redundant equipment. Compile a comprehensive list of plant and equipment that is part of the sale. Also don't forget to tidy your customer databases, formalise any verbal agreements or contracts, and detail systems and procedures to increase the value of intangibles.
Perhaps the most important aspect in attracting quality buyers is having a good set of accounts. Ensure your accounting and bookkeeping are up to date as buyers may need to satisfy lenders that they can support their living commitments, as well as service any loan from the business's earnings. Most banks like to examine three year's previous financial history to satisfy their requirement.
Traditionally buyers usually look first to the bottom line and if what they see interests them, then they work their way back up through the accounts. Ideally the bottom line needs to look good and reflect a healthy business, or at least reflect the potential for future profit making.
Although cashflow and profitability are important to buyers, there are also other aspects that will be of interest. Buyers are often seeking release from a 9-5 job and the freedom of managing their own destiny. Varying aspects of your business will appeal to different buyers, and there will be buyers out there wanting to research and compare the options prior to making any offer.
Training or transition periods can help. Your buyer may have never owned a business before and could be anxious about getting into your industry. Consider providing training to ease the transition and use this as a trade-off against concessions that are more valuable to you.
Understanding your buyer's needs is important in determining how best to pitch your business around what is important to you and the buyer, and what is needed to make the sale happen.
Information provided by Richard O'Brien - www.nzbizbuysell.co.nz.
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About the Author: Rob Keating RSS for Rob's articles - Visit Rob's website Click here to visit Rob's website   Finding the Right Business for You Who is Going to Buy Your Business Im Selling my Business But What do Buyers Want Selling a Business What is Your Exit Strategy |
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- Hi Forum Members,
I'm helping start up a Business Coaching and Consulting company here in Toronto, Ontario, Canada (a Subsidiary of RSC Business in Los Angeles).
As a Research and Development Intern I am required to practice my listening and interview skills by surveying Small and Medium Businesses on thier Business.
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At the end of these interviews I will be publishing a report of the results and they will be made available for free to the Interviewees. The Report data will include responses from a minimum of 100 interviews.
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If you would like to have this short 20-30 minute interview conducted on your Business and you reside in North America please send me an email or PM.
Please contact me at andy[at]jvprosperity[dot]com to arrange our interview and to get free access to the results when they are published.
Re: Kevin's Case Study #10 - When to become an entrepreneur?
- When the bug bite you. A lot of successful entrepreneurs started in their teens or at school. Selling sweets to fellow students or lemonade to firends in the neighbourhood.
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