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What Are Buyers of Private Companies Looking For?

Building a Five Star Business

 

The last thing a business owner wants to hear when he decides to sell his company is that changes are needed to make it really valuable.  Especially if this means several more years hard work.  The best way to stop this happening to you is to think ahead about what the eventual buyer of your company will be looking for.

So what are business buyers looking for?   We pitch businesses to potential buyers every week and these are the things that attract a buyer’s attention:

  • Consistent or better growing sales and profits;
  • A good spread of longstanding customers (certainly no customer more than 20% of sales);
  • Customers that order on a predictable and frequent cycle (daily, weekly or monthly);
  • Good quality financial information showing which customers and products are profitable;
  • A simple ownership structure (buyers hate deals complicated by different shareholder needs);
  • An uncomplicated property position (short lease position and no risk of large end of lease costs);
  • If you want a share sale a clean history of tax and regulatory compliance.

Problems in any of these areas will reduce the value of your company.

 
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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