One of the smartest things a business owner can do is build a business with the goal of planning to sell it. It doesn’t matter if you plan on selling in three years or thirty years. Ensuring that your business appeals to potential buyers will bring you success in the present and when it comes time to sell. Why? Because the things that buyers look for in a business are exactly what helps make a business successful.
According To Business Development Canada, 41% of business owners in Canada plan to sell their business in the next five years. One in five Canadian entrepreneurs intends to buy a business in the next five years. Here are the things you need to do in your business today to appeal to the right buyer.
Buyers have overwhelmingly indicated they are looking to invest in businesses that are growing and profitable. Even when priced right, unprofitable businesses are less attractive to most buyers. Buyers are looking for businesses with demonstrated stable and predictable growth. Having a carefully considered growth plan in place is essential.
When asked, 44% of businesses with more than twenty employees reported to Business Development Canada that they plan to grow by acquisition within the next five years. In order to attract a buyer looking to grow by acquisition, your business needs to be running smoothly. An acquiring buyer will be more interested in businesses that have documented policies and procedures in place. Organized records, including legal, financial, and human resources information, will help buyers to put together a clear plan for a smooth acquisition. If records and overall business operations seem chaotic or confusing, buyers will be far less likely to pursue acquiring your company.
One of the biggest mistakes business owners make is creating a business that requires their constant expertise and attention. When developing policies, procedures, and relationships with suppliers as well as customers, it is critical to ensure that you are not the only person who can handle those roles and responsibilities. Through cross-training, documentation, and planning, it is important that business owners make it easy for a new owner to take over and be successful.
Buyers will be looking for businesses to buy in Western Canada over the next few years. By taking the time now to understand what buyers are looking for, and adjusting your business accordingly, you will have greater success in your business as you operate it and you are more likely to earn a greater return on your investment when it comes time to sell.
If you are thinking about selling your business in the next few years, contact Acuity Business Group to find out how we can help with your growth plan and exit strategy.