Buyers in 2024 are very particular in what they want to see and receive when purchasing your business. They are detail oriented and want most everything to be in order. Below are things they want to be comfortable with before moving forward with a Purchase and Sale agreement.

They do not want to see a sudden drop in sales, so do not discontinue a product or service right before you plan on selling. A huge mistake made often, is to drop some of your customers a year or two before selling. They might be recently inactive customers or smaller accounts. Do not do it! Keep all your customers to show the highest income that you can. This will mean a higher selling price.

Presentation is everything! It is a must to have your business clean, picked-up and attractive when buyers walk through your doors. If you have items that need to be repaired or updated, make sure that everything looks great before they arrive. A business in disrepair will cast doubts in their mind. They might think; what else is wrong with this business?

Buyers also want to know how closely you are tied to the business and that you have owned it for at least 3 years. When you sell, are you willing to stay on for a reasonable time and train the new owner? How many hours per week do you work and why are you selling? They like to see that you have delegated some of your work towards a manager/supervisor. A great, solid staff is the real key to a solid business. The more detached you are from your business, the more a buyer will be interested in purchasing it from you.
Buyers do NOT want to hear that you are the FACE of your business. That is one sure way to send buyers running for the hills.

The lease is the single most important item of value to your business besides your customers. If you do not own the real estate, you need a solid lease that will transfer to the new owner. All too often owners try to sell their business with no lease or little time left on them. Many landlords have sold the seller’s businesses out from underneath them. Sellers are left in shock. You need a strong, transferable lease for this not to happen to you.

Make sure your financials are updated and easy for buyers to see your NET CASH FLOW. If you are stating your business NETS $250,000, make sure your P&L reflects this. Buyers today want financials in a timely manner as soon as they preview your business. If they must wait for them, they assume something might be wrong. If you do not have a Profit and Loss statement, hire a bookkeeper or accountant to put one together for you. A buyer is not going to purchase your business on your good word.

Cash Sales can be advantageous when selling your business and almost all businesses have them. When counting cash sales towards your profits, you will need to have a record of them to show buyers. Buyers will not consider what they cannot see evidence of.

Here is what buyers want for financial information:

  • 3 years Profit and Loss (P&L) statements with balance sheets
  • 3 years tax returns
  • 1-2 years of merchant credit card processing statements
  • 1-2 years of bank statements
  • A current list of furniture fixtures and equipment (FF&E)
  • A copy of your current lease
  • Owner Incentives or add backs. This list alone can add $1000s to your selling price!

What buyers want to see:

  • Solid growth in the most recent years.
  • That you have owned the business for at least three (3) years.
  • Why are you selling your business? Retirement, moving, another business interest, etc.
  • Are you delegating your work to your managers and employees?
  • How many hours are you working per week?
  • Do your tax returns match your P&L statements
  • Are you willing to stay on for a reasonable time and train the new owner?
  • Do you have a long-term lease and is it transferable?

At Atlantic Business Brokers, we will help you navigate the process above and make it easier. Be assured that your information will be CONFIDENTIAL as we require clients to sign a non-disclosure agreement (NDA) before we release any information to them, including the business address.

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