How To Build a Business Someone Will Buy

A question that doesn’t come up often enough from business owners is: “How can I build a business someone will want to buy for a lot of money someday?” I'm here to tell you how to start making your business attractive to buyers right now, even if you have no plans of selling anytime soon. If you start building value now, you'll be prepared when you decide to sell. I’ve sold two businesses in the past five years. Here are the common elements that made them attractive to buyers:

1. Profitability and net benefit to the owner. People often think the value of a business is based on the revenue, but it’s actually much more dependent on the net benefit to the owner. Another way of putting it is “seller’s discretionary earnings.” I talk with people all the time who have businesses doing a lot of revenue and making very little in the way of profits - it’s not a good place to be.

2. The owner wasn’t important to the day-to-day operation of the business.  You need to work yourself out of a job!  The new owner doesn’t want to buy a job where they’ll need to be a full-time project manager, bookkeeper, or admin.

3. Reliable systems. These businesses operated in a certain established way. You and your team shouldn’t be winging it.  Be a systems machine, look at everything that happens in the business, and document how it works and how it could be systematized to improve. Then, you’ve got a turnkey business to hand over to the buyer.

If you want to learn more about how I can help you and your team build a more valuable business, book a call with me by clicking this link. If you have any questions, you can also reach out to me by phone or email.