Buyers Are Interested In Profits, Not Revenues.
Revenue numbers do sound great, especially if a buyer is looking to fix a broken business, but the number that truly mattersis the profit in which the business turns.
Buyers Expect Verifiable Financial Records.
Be prepared to provide invoices as well as bank statements that show matching deposits from specific revenue sources. You will need to provide deposit records, transparency to your accounts, as well as real-time access.
Buyers Won't Pay More For Potential.
Business owners may believe they have a potential gold mine and expect to demand a high selling price based on on their own perception. This isn’t how it works. If a business is simply a concept without a proven revenue stream then there isn’t any extra value for potential buyers.
Don't Live In The Past.
The previous success of a business is largely irrelevant at the time of sale, especially if it has been struggling. Buyers are interested in recent performance (previous 12 months), sustainability, and viability. When speaking of past success, telling a buyer that all it needs is a little work to get back on track does not add value.
Never Judge a Buyer.
You never know whom you are dealing with or the buying power they possess. Someone asking what appears to be simple questions could potentially be a buyer that might be just new to your industry, but have deep pockets for investing. Where usually the more experienced buyers will often hammer the seller with questions in an attempt to turn up inconsistencies and red flags about the business.
The truth is going to always surface, so be upfront about everything from the beginning. Experienced investors understand that every business is going to have positives and negatives. There is no such thing as a perfect business. If you are honest and transparent from the start there is less risk of a deal going sour because the buyer uncovered something during due diligence that wasn’t accurate or an instance where the truth was stretched. Honesty is the best policy in all business transactions and selling any business is no different.