What Makes A Business "Sellable"?

1. A Growing Business is a Sellable Business

When it comes time to sell your business, you want to be able to show potential buyers that your business is still growing. This means having consistent year-over-year revenue growth and positive cash flow. Buyers are looking for businesses that they can invest in and grow even further. If your business is stagnant or in decline, it will be much harder to find a buyer who is willing to pay top dollar.

Here are some factors to consider when questioning if your business is truly growing:

• Can we show month over month positive net profits?

• Can I show that I pay myself a consistent salary as the owner?

• Do we have a consistent customer acquisition strategy?

• Do we know our net profit margins, cost per acquisition, and debt totals?

• How much business debt are we carrying as a company?

Being able to show that you are turning positive net profit margins month over month, while paying yourself a consistent salary as the current owner can make a huge difference in how attractive your business is to future potential buyers.

2. A Diverse Customer Base is a Key Selling Point

Another key factor in making your business sellable is having a diverse customer base. If you rely too heavily on one or two large customers, you could be in trouble if they ever decide to take their business elsewhere. On the other hand, if you have a large number of small-to-medium sized customers, you'll be in a much better position when it comes time to sell. Buyers like to see a healthy mix of customers, as it provides them with some degree of protection against customer attrition.

Here are some critical questions to ask yourself about your customer base?

• Would we survive if our primary client decided to stop working with us?

• How would we replace our most profitable clients if they chose to leave us?

• How established are our relationships with our current clients?

Having power partners (key clients) can be incredibly lucrative for any small business, but if that's the primary source of revenue, do you have a backup plan if the agreement were to end? A future buyer will want to know if there are other means of acquiring customers in the event that arrangement were to fall apart.

3. The Right Location can Make or Break a Sale

If you're running a local brick and mortar store, the location of your business can also be a make-or-break factor when it comes time to sell. If your business is located in an area with high foot traffic and easy access, that will definitely increase its value in the eyes of potential buyers. On the other hand, if your business is located in an area that's struggling economically, that could make it much harder to find a buyer willing to pay top dollar. Sometimes, the best solution is to move your business to a more prime location before putting it on the market. Or, if your business is able to provide remote services/products, is that a possibility.

Here are things to consider if you own a physical location:

• Do you own the property? (Sometimes the property itself is more of a sellable asset than the business itself)

• Is your business driving in person demand consistently?

• Are there services/products you could offer online to add to traditional in person revenue streams?

There are a multitude of ways to improve the perceived value of your physical location if you're willing to get creative.

Is Your Business "Sellable"?

If you're thinking about selling your business, there are several factors you need to take into account. First and foremost amongst these is making sure that your business is still growing and has positive cash flow. You'll also need to have a diverse customer base and be located in a prime spot in order for buyers to be willing to pay top dollar for your company. Keep these factors in mind as you begin the process of selling your business—it could mean the difference between getting top dollar and being stuck with an unsellable company.