Starting a new company from scratch can be risky business. Everyone on the planet has heard about how many new businesses fail in the first few years (most of them). To avoid the pain and loss of business failure, people who want to be their own boss turn to the purchase of existing businesses. The idea is that businesses which have survived several years are less likely to fail (this does tend to be true). Other than reducing the risk of failure, what are buyers looking for in a business for sale?
Many buyers are looking for businesses that match their personality and interests. This is especially true for those who are trying to escape the boredom and mediocrity of their current day job. It only makes sense that they want to trade in something they don't like in exchange for something they would look forward to doing.
There's a possibility that potential buyers will be more interested in your daily activities as the business owner than they are in the financial details of the business. They want to imagine what things will be like when they buy your business and take over the reins. Buyers may also be apprehensive about the amount of time they'll put into running the business.
However, don't assume that you'll be able to gloss over the financial information. Affordability will be a big concern for many buyers. They want to know right away if the business is in their price range. They'll probably be looking for reassurance about the company's cash flow as well. Will there be any money left over after the bills and debts have been taken care of?
Potential buyers will be on the alert for any negative reason that will explain why you're selling. Although your personal reason for selling could be completely unrelated to how your business is performing, some skittish buyers will assume that you're trying to get out just before everything falls apart. You might be unwilling to share your reason for selling if you consider that to be personal information, but buyers might need to be reassured that everything is alright.
Even if your business is performing well, buyers also want to know how your industry in general is doing. Of course, well-performing businesses in growing sectors can command a high sales price. An honest assessment of how the industry you're in is performing in general is something that every buyer will probably want to hear.
Potential buyers of your business will want to be crystal clear about exactly what they're buying. Business inventory, assets, the legal name, the client list, even the list of suppliers you use--you'll need to determine which of these aspects are part of the sale. Remember, buyers don't just want to buy your business, they want to buy the success and the reduced risk too. They buyer will want probably want the entire package to make sure they get the critical ingredient needed to avoid failure.
Believe it or not, the buyer might be interested in offering you a job after the sale. Your knowledge, experience and history with the company could be invaluable to the new owner. This is especially true if you're the one who started the business from the beginning. In a very real sense, you are the business. A public endorsement of the new owner by you will make a big difference in how clients and suppliers will react to the sale. You could spend a few months after the sale consulting with the new owner to ensure a smooth transition. It depends on your personal situation and immediate plans, but staying on as a consultant could be a win-win situation for all.
You can be sure that every potential buyer of your business is looking for a successful business at a price they can afford. But "reasonable pricing" and "good value" aren't necessarily your strongest selling points. The final decision to buy may be more strongly determined by emotional factors. What are the buyer's dreams? What is their current situation? If you can capture the imagination of the buyer while at the same time providing a solid financial basis for justifying his decision, you're much more likely to sell your business for the price you want.
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