Examining the Mind of the Serious Buyer – Five Points to Consider
Are you looking for a way to perfect your presentation? Understanding what the typical serious buyer wants will help you get your business ready for selling.
Let’s turn our attention to looking at what these types of individuals and entities really want. After all, your time is precious.
1. An Interest in the Industry
First, prospective buyers will want to have a better understanding of your industry. Any serious buyer will want to understand the industry as a whole, as well as your existing customers, prospective customers and the strengths and weaknesses of your business. Key factors, such as threats from competition, will also be a major factor for prospective buyers.
2. Seeking Knowledge about Discretionary Costs
Secondly, expect buyers to take a long look at discretionary costs. Sellers will often look to reduce their expenses in a range of discretionary areas including advertising, research and development and public relations; this is done to help make a business appear more attractive to a buyer. However, it is important to note, that a savvy prospective buyer will notice reduction in discretionary expenses.
3. Inquiries about Wages and Salaries
Wages and salaries is another area that receives attention from buyers. If your business is paying minimum wage or offers a limited retirement program then employee turnover is likely to be high. Buyers may be concerned that employee stability may be low, which, of course, can potentially disrupt business.
4. Questions about Cash Flow and Inventory
No serious buyer will ignore the issue of cash flow. Any prospective buyer will want to know that the business they are considering buying will continue to generate profits both now and in the future.
Inventory is another area that will not be ignored. If your business is carrying a large amount of antiquated, unsalable or simply unusable inventory, then expect that to be factored into a prospective buyer’s decision-making process. It is best to disclose such inventory instead of hiding it, as it will be discovered during due diligence.
5. Seeking Capital Expenditure Details
Finally, capital expenditures will be examined by buyers. You can expect buyers to carefully evaluate machinery and equipment to ensure that there will be no expensive surprises looming on the horizon.
These give areas are definitely not the only areas that buyers will explore and investigate. Everything from financial agreements and environmental concerns to government control will be examined in depth. You should invest some time thinking about the situation from the perspective of a buyer, as this will help you discover many potential problems and try to secure viable workarounds. Working closely with a business broker is another way to ensure that you can successfully anticipate the needs of buyers.
Copyright: Business Brokerage Press, Inc.
Read MoreImprove your Business Success with Active Listening
- Face your customer and give him, her or them your complete and undivided attention.
- Show you’re paying attention through your own body language. Sit up straight, maintain good eye contact, uncross your legs, unfold your arms, and lean forward slightly.
- Turn off your cell phone.
- Respond appropriately to show that you understand by nodding your head in agreement.
- Encourage your customer to give you more information by using open-ended questions such as “How did you feel when that happened?”
- Keep an open mind and don’t jump to any conclusion or make assumptions. Wait until your customer has finished speaking before deciding that you disagree.
- Don’t interrupt your customer when they are speaking.
- Ask questions for clarification and periodically summarise comments. Paraphrase your customer’s key statements to make sure you didn’t misunderstand their point of view. Start with: “So if I’m hearing you correctly, you’re saying…”
When people are in conflict, they often contradict each other, denying the opponent‘s description of a situation, according to the Colorado consortium. This can make people defensive and shut down or get angry. However, if they feel that they are negotiating with someone who really understands their concerns, they are more likely to explain in detail what they feel and why. If both parties to a negotiation do this, the chances of being able to reach an agreement becomes much greater.
To find out more about being a good listener, visit the International Listening Association.
Is Now the Right Time to Sell Your Company?
Like many things in life, timing can be everything when it comes to selling your company. Every day more and more baby-boomers are now reaching retirement age. Soon, the market will likely be flooded with companies looking to sell.
According to a 2016 survey of business brokers, 54% plan to exit in the next ten years. We may be on the verge of a massive wave of businesses hitting the market. Getting out in front of that wave could be in your best interests. Now very well may be the time to sell.
Are You Suffering from Burnout?
If you’ve been running your business for many years, it is quite possible that you are suffering from burnout. This issue is remarkably common with business owners and it is also very dangerous. Owners suffering from burnout don’t invest as much of themselves and their creative energy into their businesses, and that has a range of implications.
Everything from losing customers to failing to keep up with the competition are all possibilities when an owner feels ready to throw in the towel. The end result is that owners, through poor decisions and inaction, can inadvertently decrease the value of their businesses. Combine this fact with the fact that a wave of businesses may soon be hitting the market and selling may start looking more and more attractive.
Jump into a Strong Economy
Further, today’s strong economy means that new and unexpected competitors may soon enter the picture. It is difficult to predict how the marketplace may change in the coming years, but a strong economy means both more opportunities for existing businesses and the potential for greater competition.
Interest rates have remained at historic lows and that could definitely help you sell your business. Working with an experienced business broker is one way to test the waters. You may determine that now is the perfect time to sell your business. There are many factors involved in selling your business, and a skilled broker can help you look at the overall situation at hand and determine when it is the right time to sell.
Copyright: Business Brokerage Press, Inc.
Kasia Bialasiewicz/BigStock.com
Read MoreIf You’re Selling Your Business, Expect the Unexpected!
Many experts say the best time to prepare to sell your business is when you start your business. Few business owners reach that level of preparedness. Most business sales are event-driven. Factors such as problems with a partnership, health issues, burnout or even divorce can drive a business owner to sell.
Once you’ve made the decision to sell your business, know this: Unexpected events and factors will always rise to the surface. In this article, experienced business brokers offer advice on four key questions that you’ll need to answer before selling your business.
1. What is the Value of Your Time?
Meeting with prospective buyers can be a serious time sponge. One of the key benefits of working with a business broker is that a broker can take some of the pressure off of you. They can interact with buyers on your behalf.
A large percentage of business owners are also deeply involved in the day-to-day operation of the business. Business owners don’t have time to meet with every interested party or take the time to weed out the qualified prospects from the window shoppers.
2. What Do You Want Your Level of Involvement to Be?
Working with prospective buyers is obviously time consuming, but so is knowing every detail about a prospective buyer’s visit. A seasoned business broker can sift through what information is essential and what information is extraneous. In this way, you only hear about what is relevant and can skip the rest.
It is important for business owners to keep in mind that buyers expect that the business will continue to run successfully not just during the sales process but through closing as well. For this reason, you’ll want to stay as focused on the day-to-day operations of your business as possible; after all, if a deal falls through the last thing you want is to have a dip in revenue.
3. Are There Other Decision Makers?
Determining whether or not there are any other decision makers is a very smart move. Part-owners and silent partners will have to be addressed when it comes time to sell. They likely will have to agree to terms of the sale before the deal can go through. Be sure to talk to them before finalizing any deal. Professional business brokers can help you negotiate with these decision makers.
4. Just How Important is Confidentiality to You?
Confidentiality is important when it comes to selling your business. The more active your selling process, the greater the chances are that you’ll have a leak if you’re not extremely careful. Leaks unfortunately occur more than you might think.
How much will this issue negatively impact your business if it does occur? You should have a “leak plan” ready to go. In your plan, you should have in place what steps you should take to minimize the damage caused by the leak. Being ready to deal with key customers, employees and distributors is the cornerstone of dealing with any leak. Business brokers are experts at helping clients maintain confidentiality. This can save you a great deal of time and effort on many fronts.
By answering these four questions fully, you will save yourself time, stress and effort. Selling a business is a complex process. But with the right planning, you can minimize your effort and maximize your results.
Copyright: Business Brokerage Press, Inc.
Read MoreIf You’re Selling, Get Ready to Expect the Unexpected!
Many experts agree that the best time to prepare to sell your business is when you start your business. That may sound extreme. However, few business owners reach that level of preparedness. A simple fact of life and owning a business is that most sales are event-driven. Factors such as problems with a partnership, health issues, burnout or even divorce can drive a business owner to sell.
Once you’ve made the decision to sell, it is essential that you realize one key fact. Unexpected events and factors will always rise to the surface. In this article, we’ll explore four key questions that you’ll need to address before selling your business.
1. What is the Value of Your Time?
Meeting with prospective buyers can be a serious time sponge. One of the key benefits of working with a business broker is that a broker can take some of the pressure off of you. They can interact with buyers on your behalf.
A large percentage of business owners are also deeply involved in the day-to-day operation of the business. Business owners don’t have time to meet with every interested party or take the time to weed out the qualified prospects from the window shoppers.
2. What Do You Want Your Level of Involvement to Be?
Working with prospective buyers is obviously time consuming, but so is knowing every detail about a prospective buyer’s visit. A seasoned business broker can sift through what information is essential and what information is extraneous. In this way, you only hear about what is relevant and can skip the rest.
It is important for business owners to keep in mind that buyers expect that the business will continue to run successfully not just during the sales process but through closing as well. For this reason, you’ll want to stay as focused on the day-to-day operations of your business as possible; after all, if a deal falls through the last thing you want is to have a dip in revenue.
3. Are There Other Decision Makers?
Determining whether or not there are any other decision makers is a very smart move. Part-owners and silent partners will have to be addressed when it comes time to sell.
4. Just How Important is Confidentiality to You?
Confidentiality is important when it comes to selling your business. The more active your selling process, the greater the chances are that you’ll have a leak if you’re not extremely careful. Leaks unfortunately occur more than you might think.
How much will this issue negatively impact your business if it does occur? You should have a “leak plan” ready to go. In your plan, you should have in place what steps you should take to minimize the damage caused by the leak. Being ready to deal with key customers, employees and distributors is the cornerstone of dealing with any leak. Business brokers are experts at helping clients maintain confidentiality. This can save you a great deal of time and effort on many fronts.
By answering these four questions fully, you will save yourself time, stress and effort. Selling a business is a complex process. But with the right planning you can minimize your effort and maximize your results.
Copyright: Business Brokerage Press, Inc.
Read More