Expert Strategies For Finding A Buyer For Your Business

Business experts with extensive experience with mergers and acquisitions all agree that it is important to always be thinking about the future and how you will cash out of your business. Interestingly enough, many entrepreneurs actually start a new business with the main goal of cashing out in a short period of time. While entrepreneurs all have different ideas and motivations for building a business, savvy business people always have a goal in mind for how they will move forward when it is time to sell the business.

Build a Strong Network of Advisors and Industry Contacts

We’ve all heard that wise saying about success being tied to who you know more than what you know. This supposition has been proven out over time. With that idea in mind, it is important that business owners cultivate relationships with industry leaders, business advisors, and other knowledgeable professionals. It’s always a good idea to extend yourself to investment bankers, accountants, and attorneys.

The higher your profile is in the community, the easier it will be to obtain introductions and advice when you need it. It is never too late to get started networking with the movers and shakers who negotiate deals and inspire others to take action. By establishing a presence in your industry as a leader with a stable business, it will be much easier to sell when you decide the time is right.

It is no secret that many deals are made on the golf course. With this fact in mind, you can schedule your social calendar in a way to make the most of your time. The secret to success is to surround yourself with people who make things happen. It is amazing how often we create our own luck by connecting with powerful people who can help us along. But, remember, the best way to forge a good friendship is to offer them something of value. These important relationships are a give and take affair.

Maintain Meticulous Financial Records

CNBC recommends having up to five solid years of detailed and complete financial statements for buyers to review. Considering that some buyers may ask for audited financial statements, it is crucial that business financial records are accurate and complete. Audits are designed to verify these reports. Any figures or claims that appear to be unsubstantiated by financial statements can cause problems when it is time to sell.

In addition to financial statements, auditors will want to review leases, contracts, tax records, and any assets the company owns. Having these records available for review by auditors or the buyer’s attorney will make it easier to move forward with potential buyers.

Sellers might want to consider renegotiating any leases or other agreements that might scare off buyers. For example, if you own a retail business and your lease is up in a year, a buyer might worry that the rent will increase and cut into profit margins. For this reason, it is a good idea to renegotiate any leases expiring in the near future. Uncertainty is your enemy when selling. Buyers can be timid and might shy away from perceived risks.

Experts advise sellers to transfer assets that they don’t want to sell with the business. Eliminating possible points of contention ahead of time is key for negotiation success. This action will likely improve your balance sheet by eliminating certain expenses.

Some assets that are often eliminated before selling are cars and real estate. Sellers must make tough decisions when it is time to seriously prepare for the sale. Get financial advice from trusted accountants and attorneys about the best way to move forward at this point.

Prepare Standard Operating Procedures (SOP) Manual

When establishing a business, it is important to have corporate policies and procedures in writing in the form of a Standard Operating Procedures manual. This type of detailed manual provides prospective new owners and managers with the information they need to take over the operation of the business. New business owners and managers need to feel comfortable that they will be able to run the business. Organized businesses are expected to be able to provide this type of manual.

One of the biggest mistakes that many small business owners make is keeping everything in their head and not writing down important operational instructions. This type of seat-of-the-pants management style will work only as long as the key players remain in the picture. A smart buyer will be driven away by this type of casual management style.

The good news is that it is never too late to prepare a Standard Operating Procedures manual. Before actively trying to sell your business, it is critical that you finish this task. By interviewing key players in your organization, this manual can be prepared within a week’s time.

Hire the Best and the Brightest

Smart entrepreneurs understand the importance of hiring the best employees they can. While it is common for some small companies to try and hire the cheapest labor possible, this type of mindset will show up on your financial statement negatively. Granted, your budget is important, but try and cut corners in other areas when possible so you can hire the best people.

A lot of what you’re selling when you cash out of your business is the skilled employees. Buyers will review turnover numbers and are likely to be turned off if they see a business with high turnover. It is no secret that high turnover translates into a management nightmare, especially when unemployment numbers are low overall.

Time the Sell of Your Business for Best Results

Just like poker, there is a time to sell and a time to hold. Entrepreneurs who plan on getting top dollar for their business should try and time the sell of the business during peak periods of growth when the business cycle is on the upswing. Comparatively, if you decide to sell in a bad year when earnings haven taken a dip, you risk looking like a person who is trying to dump a loser.

Additionally, it makes more sense to try and sell your business when the overall economy is doing well. During robust economies, there is more money flowing and business people are more optimistic about buying a business. Inc. cites the International Business Brokers estimate of company value as being linked to earnings, market outlook, personnel, fair market replacement, brand, and industry reputation.

Smart sellers plan for the sale of their business by considering all of the factors above. It makes sense to exploit a good business year to position yourself for the best return for your hard work. Timing can make a huge difference in how much you get for your business.


When you are ready to sell your business, be sure you know the right people to make it happen. A thriving business with a team of dedicated employees is not difficult to sell if you have the right contacts and market conditions. Devoted board members, business brokers, investment bankers, attorneys, and industry associates can all be important contributors to your success when it is time to sell.

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