Successfully selling a business doesn’t just happen. It includes, but is not limited to, a combination of many factors:
- A valued product or service
- Positive, consistent cash flow
- Predictable, repeatable business
- Customers who pay well
- Engaged and productive employees
- Responsible leadership beyond just the owner
- Revenue that’s increasing
- A market that is growing
- Diversification of products and customers
- A positive reputation
- A well-known and respected brand
- A strategic location
- A motivated seller
- A motivated buyer
What is often left off the list is fortunate timing and good luck. Potentially, you could put a checkmark beside each of the factors on the list and still not find a buyer. Unlike the market for a three-bedroom bungalow in a hot neighbourhood, there are not hundreds of prospective buyers for your business. There are only a few and the stars need to align.
I like to share the advice of Thomas Deans: “Your business should always be ready to sell.” If you have a motivated buyer but you’re not ready, then you could miss a window of opportunity.
Imagine I’m your prospective buyer. I’m looking for a business. I have money. I have time. I’m ready. I might go to a business broker or I might just do my own homework and begin looking at businesses in my sector of interest. Your business is one of four that rise to the top of the list.
It will be difficult to compare all those items on the list objectively; but one of those business owners is going to get lucky. He or she will have the slight edge. Something that differentiates their business from the others and makes it stand out. Being the one will be like winning the lottery. By getting your business ready to sell at any time, you increase your chances and give you the slight edge in the competition for making that sale.
And, it will pay dividends today as well. A company that is ready to sell is more successful because it’s a well-managed business. Imagine you could put a checkmark beside each of the above bullets. You’ve already got the slight edge. Selling the business is icing on the cake.