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The Mind of the Buyer: 5 Things the Business Seller Must Know

Posted by webtech on March 10, 2011
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The key to selling your business is understanding the motivations of the buyer. What do they want out of buying a business? Why are they interested in yours? Here are the main attention-getters for a vast majority of prospective business owners.

business-buyer-doing-research

Cash Flow

Although a buyer might be sincerely passionate about the business’ products or services, perhaps not surprisingly, the primary thing business buyers are look at is income. Whether that cash flow is for a living wage, or for a return on investment, buyers sometimes base their entire decision to purchase around the amount of income they’ll be able to generate.

Stability

The buyer also wants the “trading-of-hands” to happen securely, and they’re obviously interested in maintaining the business’ stability for years to come. Buyers will undoubtedly be turned off by unorganized records, unpredictable employee behavior, and other concerns that might lead them to believe that the business isn’t on stable ground.

Financing

Buyers become more interested in a particular business when their is a substantial amount of financing involved. The truth is that most business sales include some seller financing even if the business qualifies for third party financing. All in all, it’s a major perk for the buyer and gives him/her confidence that he can rely on the seller’s support post closing if necessary.

Up-to-date Knowledge

Business buyers want to stay “in the know” about the latest happenings with the business they’re interested in. Even though the seller might be tired of the business and ready to bow out, it’s important to keep things running quickly and efficiently. The buyer is really interested in seeing how well the company can flourish.

Quality Business Valuation

Obviously, nobody likes overpaying, and this couldn’t be more true when buying a business. After all, it’s a massive investment, and making a mistake could be detrimental. That’s why it’s important for the seller to work with a highly experienced business broker to get an adequate reading on exactly how much the business is worth. Doing so will make things so much easier for the buyer.

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