Setting your business up so that someone will want to buy it involves looking at your business from the perspective of a prospective buyer from day one. What are potential investors looking for? The obvious answer is that they want to make a return on the money they plan to invest in your business. Below are the three most important ways to increase the appeal of your business, regardless of its size, to potential buyers, as offered by Andrew Griffiths.
- Show that your business is built on a solid foundation: This can be achieved by having a business and marketing plans. Even if they are only simple and straightforward, it shows that you are strategically building your business, and not just haphazardly. Having customer testimonials, and even supplier testimonials about your business are also advantageous because they demonstrate that you are good at what you do.
- Have a clean business slate: Make sure there your tax and business records are up-to-date and accurate, and that any issue with customers and suppliers have been resolved. Ongoing disputes can make your business less appealing. Ensure that legal documents are filed as required and that things like leases are all in order and current.
- Show the potential of the business: This is the critical area that prospective buyers are looking for. Are there ways to increase the lucrativeness of the business and the number of its customers? In other words, is there potential for growth? Industry trends can show the potential of the firm. Furthermore, the local business activity for your region, the degree of customer loyalty and continued growth in the business entity’s turnover or at least consistent profits can be attractive to prospective investors.