What does it feel like to sell your company? Many business owners say it feels like giving a child up for adoption. As it turns out, that’s not just a metaphor. Research shows entrepreneurs really do think of their business as a kid.
Management team ranked number five on the buyer due diligence list. A good succession plan and backup support is still incredibly important to the saleability and value of your business, but it seems that the strength of your overall employee team is – at this moment in time – an even bigger priority.
In the latest IBBA and M&A Source Market Pulse Report, a quarterly survey of M&A advisors, employee issues topped the list of buyer due diligence concerns. Employees, specifically longevity, loyalty and work ethic, ranked ahead of other priorities like operations, revenue and customer concentration.
If you work in M&A, you can take a class on how to take advantage of people. It’s true. Buyers can go through mergers and acquisitions training, at some of the most prestigious universities, learning how to pay has little as possible for a family-owned business or privately held company.
When buying a business, one of the qualities buyers look for is barriers to entry. The harder it is for someone to get started in your business or take away your customers, the bigger the barrier.
When selling your business, you may receive offers from three kinds of buyers: Individual, financial, and strategic. Here’s a look at the most common buyers and where their motivations lie.
Top reasons to consider buying an existing business:
Calculate the value of your business using these tips. There are many methods for business valuation but the goal is always to sell at the right price.
Economically speaking, COVID-19 was a “natural disaster.” That’s according to Brian Beaulieu, CEO and chief economist of ITR economics. Beaulieu spoke at the virtual State of M&A conference hosted by Cornerstone Business Services in February, helping business owners and advisors understand the market ahead.
Learn the types of questions to ask when considering buying a business. They should be specific and give you a clear picture of what the business has to offer.