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Is Your Business Saleable?

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It is an uncomfortable truth about the market for the sale of private companies that not all businesses find a buyer. So what separates the saleable companies from the difficult to sell lemons?
 
As A Broker How Do We Decide If A Company Is Saleable?
 
As a longstanding UK business broker hard experience has taught us that selecting clients with saleable companies is the main driver of our own success. At every first meeting with a potential client our focus is always on identifying reasons why a business will make a good acquisition for a potential buyer. If we can’t see those reasons, it is going to be difficult to find a buyer. One simple phrase sums up our approach: “You can only sell a business if someone is prepared to pay for it.”
 
So What Are The Things We Look For To Decide If A Business Is Saleable?
 
Customer Base

Does the business have a good spread of longstanding customers? A business that is dependent on one large customer is going to be difficult to sell. If some of the main customers have only been with the business a couple of years, this will create doubt about the durability of the relationships.

Growth

Are sales and profits growing – or at worst stable? If you have been experiencing declining sales and margins for a number of years, buyers will be dubious about the sustainability of the cash flow they are being asked to buy.

Solid Operations

Buyers like well-organised businesses with sound management, reliable processes and good quality assets. If your business is run on a shoestring, and dependent on your personal intervention to hold things together, it will not be attractive to a buyer.

Financial Health

A business that is in financial trouble is difficult to sell. Potential buyers will wait to see if you go bust, as this will present them with an opportunity to buy the assets at a distressed price.

Clean Financials

Businesses with messy balance sheets (complicated director’s loans, dubious stock balances, adverse tax audits, uncollectable receivables, non-working family members on the books) will put off buyers. Sort these things out at least a couple of years before you want to sell. Better still don’t do this type of thing at all if you are hoping for a lucrative exit.
 

If you are interested in finding out more about these and other issues relating to the sale of a private company one of our business sale experts would be delighted to talk to you in complete confidentiality. Click CONTACT ME to book an initial phone conversation or call us on 01604 432964.

 
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