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.

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