Today’s guest posting comes from John Martinka of Partner on Call. John is a Business Buyer Advocate, helping to connect them to sellers, conduct thorough due diligence, understand the transaction, and to buy a business that’s right for them. John will be a guest speaker at our Preparing Your Business For Sale seminar on Sept. 23.
Business buyers are by nature a skeptical lot. Because they typically start their search for a business on the Internet they see too many lousy companies dressed up to look charming and attractive. It doesn’t take them long to realize the true situation of those firms. Business owners/sellers need to realize this as they start the process for an eventual sale.
The seller can influence most of what a buyer wants. One thing a seller has no control over is the answer to the question, “Do the buyer’s skills fit with this business?” Get this out of the way early. Don’t waste time trying to sell a sales oriented business to a manufacturing engineer or vice-versa.
However, a seller can ease a buyer’s mind on other important topics. Some of the top issues to buyer are:
• Is this a good business but not a “perfect” business, so I can add value?
• Is there growth potential? A deal is based on what the business has done but it’s rare that a buyer doesn’t want to grow the business and they must see how they can capitalize on the potential.
• Buyers want to be comfortable with the financial statements. They don’t want to feel they are crossing a landmine field to get to the real profit number.
• No surprises please! They want the seller to have run the business as if it wasn’t being sold. Equipment is purchased as needed, marketing it done so there is a full pipeline of prospects, there is no need for large computer system upgrades in the immediate future, etc.
• Is there a team in place so the buyer can work on the business not in the business (after the transition)?
John Martinka has a Masters Degree in Economics & Finance and is an author and national public speaker. He has expertise in business acquisition and problem solving. He has owned profitable companies; led a turnaround and successfully opened consulting practices in 10 cities. Mr. Martinka has used the Partner On Call programs in his consulting business since 1994.