Selling a Business? Get in the Mind of the Buyer

Jan 19, 2010, 12:09 ET from California Association of Business Brokers

SACRAMENTO, Calif., Jan. 19 /PRNewswire/ -- Despite the economy, there are potential buyers out there looking to purchase their own business. So it is the seller's job to market their business to draw those buyers in. "Knowing what is on the mind of buyers is key in knowing how to prepare a business for sale," stated Julie Gordon White, president of the California Association of Business Brokers (CABB) and of Business Team Business Brokerage.

According to the annual CABB survey of its membership on trends in the business brokerage industry, there are some top items that buyers look for when purchasing a business. "Knowing what is most important to the buyer puts a business owner in a better position to sell," stated Gary Bayus, vice president of communications for CABB. "A reputable broker knows what buyers want and should be able to help a business owner get a company ready."

The CABB membership survey highlighted three items that are on buyer's minds when looking to purchase a business:

Does the business have a future? A buyer wants to know that a business has growth potential. Sellers should be prepared to show that the business has steady financial growth and has new markets to tap into. A buyer also wants to know that the success of the business does not totally depend on the previous owner; the service or product is what keeps cash coming in.

Does the business show a profit? A buyer is going to comb over every financial aspect of the business, especially in today's economy. Make sure finances are in order, as well as other business processes like inventory and vendor lists, insurance policies, and daily business records.

What is my top price? Not only will a buyer have an idea of their top price, but they will most likely seek alternative ways of financing the deal. A seller should expect to be asked and consider seller financing as a way to get a deal done.

In addition to knowing what the buyer is looking for, Bayus suggests using a certified business broker to help keep negotiations moving forward. "Time kills most deals," Bayus stated. "Your broker can help keep things moving forward until the process is done."

SOURCE California Association of Business Brokers