5-Point Checklist to Help Your Business Sell

From our experience of helping thousands to build their businesses and also to sell their businesses, we’ve found there are 5 key reasons most don’t sell.

We also provide some counters to each to serve as a checklist to help your business sell.

#1 Price is too high

Because your business has done so much for your life, this could cause you to overvalue your business.

Buyers, on the other hand, are mainly looking at the numbers and looking for acquisitions that make sense for the value.

Takeaway: Pricing fairly is key and should be at a multiple of profit (or whatever metric is most common) that is reasonable for your industry.

#2 Complicated business to run or too much work

Buyers want a source of income without having to put too much effort into keeping it going.

Takeaway: If you can convince people that your business is a source of passive income – a money printer on autopilot – this will help significantly in getting it to sell.

#3 A business that’s hard to improve

It’s hard for a buyer to scale a perfect business compared to one that has some areas for improvement.

Many buyers are looking for some “quick wins” to produce.

Takeaway: You should improve the business as much as possible before selling. But you should also brainstorm ways that the business could be improved if time or skills didn’t allow under your watch. For example, if you focused on getting organic traffic to an online business and didn’t do much with social media, let prospective buyers know this is a place for potential improvement.

#4 Limited growth opportunities

If buyers can’t see how they can make a return on their investment, they’re less likely to invest.

Takeaway: Let buyers know how they potentially grow the business, such as adding affiliate partners, developing courses, or creating their own product or service.

#5 Not being flexible in negotiations

The buyer is taking the biggest risk. Despite their due diligence, they aren’t sure what they’re going to get precisely.

Understanding this can help you be more collaborative versus trying to hold out to get the most money.

Takeaway: Knowing the true value of your business is most important. Negotiating earn-outs is also a possibility, especially for higher-priced businesses. The more the buyer earns in the period after the sale, the more the seller earns as well.