Daily Archives: October 25, 2019

Technical Hurdles that Make a Business Less Attractive to Buyers

When getting a business ready for sale it is always a great idea to involve a business broker San Diego. He has the knowledge and network you need to sell your business fast and for maximum profit. In most cases, when getting a business ready most people only focus on what buyers want. They look at things like competitive edge, management structure, scalability and culture. While your business may satisfy these criteria, there are technicalities that will affect the sale. This is what we will look at in this post.

Worker classification

Business buyers want to be sure that you have the right team in place. For example, if most of your important members are classified as independent contractors and not employees then your business will not be as attractive. The common mistake most business owners make that end up scaring buyers off is that of misclassifying their employees. The first advice business brokers San Diego will give is for you to hire the right team and classify them properly.

Leases

Another thing buyers consider is the terms in your lease. Can you assign the lease without the consent of the landlord? If the answer is no then a buyer may be scared because if they buy your business and the landlord refuses to renew the lease then they will be at a loss. It is good to negotiate the lease terms with your landlord well in advance to avoid complications. Buyers will not be interested in your business if they cannot assume the lease and if it will be hard to move the business to a new location.

Long-term supplier contracts

Long-term supplier contracts make a business more attractive to a buyer but only if the terms in those contracts are favorable. If the terms are worse than what is available in the market then potential buyers will be scared off. On the other hand, long-term contracts that contain terms that are unbeatable in the market will make your business more valuable.

Inefficiencies

After performing a business valuation your business broker San Diego will point you to the inefficient employees or processes. You duty before listing your business is to increase efficiencies without decreasing the quality of your products and services. Doing so will make your business more attractive.

These are common technicalities that can either make or break a deal. The key is to do your research and consult with a business broker in order to ensure your business is in the best position to sell.

Business broker San Diego

Business Broker Orange County - How to Get Your Business Ready for Sale from the Beginning

Hiring a business broker Orange County is the first thing you need to do when thinking of selling your business. The broker can help you close the deal fast and help get the best price. But how do you guarantee your business sells for maximum profit? The answer is to always ready it for sale right from the beginning. Here are the most important things you should do. 

Know what buyers want

If you don’t know who your buyers will be and what they will be looking for you will not be able to get your business ready for sale sufficiently. Even if you don’t plan on selling in the near future, you should consult business brokers Orange County for some insight on what buyers look for. There are three main things they consider.

Profitability

Buyers want to know if your business is turning a profit or not. They also want to know if there is room for growth and if the business has any significant debt service obligation. Buyers want to invest in a business that guarantees a return on their investment. The business has to be profitable.

Competitive edge

What makes you unique? This is the question buyers will be asking themselves when they come to you. If your business only offers commodities that can be found easily and legally then you are not a good enough investment. Your products or services need to be different from those of your competitors. You, therefore, need to work on your competitive edge if you plan on selling your business later. Trademarks and patents will make your business more valuable.

Systemization or management structure

Can the business run profitably without you? If the answer is no then it is not as valuable as you might think. The first thing your business broker Orange County will recommend you do is get yourself from operations. This means hiring a management team to take over your responsibilities. You also need to bring in a skilled team that fits their job description. Well documented systems will further make it easy for a new owner to take over.

Scalability

Does your business have room for growth? The purpose of this question is to help the business buyer determine if your business is scalable. If your business is dependent on trained professionals who must interact with customers on deep levels so s to be successful then it is not highly scalable. Following a business valuation business brokers Orange County can help identify new opportunities that help improve your customer base.

These are the key things you need to start doing today if you plan on selling your business on a later date. There are several other technicalities you need to be familiar with in order to make your business more valuable to buyers. Bringing in an experienced business broker to help with preparation will bring great benefits.

Business broker Orange County