Businesses with great leadership are more valuable than those without. Here are some of the characteristics buyers look for in a great seller:
- Honesty and integrity. Every buyer wants to know they can trust what they see and hear. Are they buying a business from an owner with a stellar reputation in the industry? Is he or she respected among peers and subordinates? Has the owner followed appropriate protocol for financial reporting and legal matters? Honesty and integrity matter. Run your business the right way, and you will be rewarded with a smooth diligence process at the time of sale.
- Excellent leadership. Every buyer wants to inherit a well-oiled machine. Company culture is critical, and thriving companies understand the importance of creating an environment that will retain their best employees. This starts at the top. Are you a great leader raising other strong leaders? Can the business operate successfully in the absence of the owner? A self-sustaining business with positive company culture makes a compelling case for a buyer.
- Continued interest in the business. Many buyers, especially financial buyers, like to see an owner with a passion for what they do who believes in the future growth potential of their company. If you are open to retaining a piece of equity or having a continued role in the business for some period of time, this is often seen as a positive sign that your company will have a smooth transition and a strong future.
- Well-implemented systems. Some business owners run their business with few controls. Others have detailed systems and metrics that have been implemented consistently throughout business growth. Do a self-evaluation: do you have well-documented, written methods for company practices and procedures? It is not uncommon for businesses to experience growth without documenting new processes or for one or two key employees to become experts in a specific area of work. The more well-documented all company policies and procedures are, the more confident a buyer will be about a smooth transition of ownership.
- A motivated seller. This may seem obvious but is something that can quickly get in the way of a timely process. Are you really ready to sell your business? Owners who aren't highly motivated can frustrate buyers with indecisiveness in the transaction. Explore your options ahead of time and begin the sale process when you really know the time is right. This will facilitate a smoother process for all parties involved.
Take some time to do a little self-evaluation before you decide to sell. Be the seller you'd want to buy a business from.