If you’ve read some of my other posts on SixtyandMe, you know one of my core beliefs about selling a small business: it doesn’t matter what you think your business is worth; it only matters what someone is willing to pay for it. Thus, the most successful sales happen when you deeply understand your buyer’s perspective.
What Buyers Care About Most
Buyers approach a potential purchase with their own set of priorities, concerns, and goals. By stepping into your buyer’s shoes, you can create a win-win scenario that makes your business not only attractive but irresistible.
Profitability and Growth Potential
Buyers want to know if your business is profitable now and has room to grow in the future. To appeal to most buyers, be prepared to provide clear financials, realistic projections, and a well-documented history of performance to showcase your business’s potential.
Operational Efficiency
A buyer will look for systems and processes that run smoothly without heavy owner involvement. If your business can thrive without you, it’s a more enticing opportunity. If your business can’t operate for at least three weeks without you calling in every day, you have work to do.
Risk Management
Buyers assess risks carefully. Are there key customers or suppliers your business relies on too heavily? Are there legal or industry-specific risks? Look at your business through this lens. Identify and address these issues right now. It may take some time to create a more diversified customer or client base, so the sooner you start to broaden your base the better. If you need help with this step, ask a business coach to help you strategize and take action.
Customer Retention and Loyalty
A loyal customer base signals predictable revenue and lower post-sale risk. Buyers are reassured by strong retention metrics, robust customer relationships, and diversified client portfolios, all of which reduce uncertainty during the transition. Showcase retention metrics, for example, customer retention rate (CRR), customer lifetime value (CLV), and repeat purchase rate. If you don’t have these metrics, figure out how to start collecting them.
How to Gain Buyer Insight
Do Your Research
Understand the buyer’s industry and goals. Are they looking for an investment, a strategic acquisition, or a new career path?
Ask Questions
Early conversations can reveal what’s important to a potential buyer. Tailor your pitch to align with their priorities.
Leverage Advisors
CPA’s, business valuation experts and exit planning advisors can offer insights into how buyers evaluate businesses like yours.
By understanding what buyers want, you position yourself to address their needs proactively. Not only does this increase the likelihood of a successful sale, but it also lays the groundwork for smoother negotiations and a positive transition.
Final Thought
Selling a business isn’t just about handing over the keys – it’s about creating a vision for the buyer. When you understand their perspective, you can make your business the opportunity for which they’ve been waiting.
Let’s Have a Conversation:
What’s the most appealing part of your business to a potential buyer? Are you prepared to improve your business value before selling? Please share your thoughts in the comments below.
