Think Like a Buyer

Think Like a Buyer
In our last blog on preparing your business for sale, we talked about how to measure value in a private company. In this blog, we want to encourage Owners  to think like a buyer when they are positioning their business for sale. It is easier said than done but if you look at your business with this fresh perspective, you will be more likely to achieve the sale at a higher value.

Depending on the motivation of the buyer, they will want to see different things in your business. So putting yourself in the Buyer’s shoes may help you anticipate what they are going to ask for as part of their due diligence. For example, what are the key risks in your business, and what can you provide them to show that those risks have been mitigated? If the buyer is looking to acquire your company because it compliments theirs,  can you show  them how your business would give them a strategic advantage in the marketplace?   Once you understand what their motivation is, you can tailor your approach to compliment this.

It is crucial that you think about what you are bringing to the table.   Do you truly know your strengths and weaknesses?  Understanding your weaknesses is just as important as understanding your strengths. It gives you the ability to articulate how they can be turned into opportunities for someone else.   For example, our market potential is large, but we simply don’t have the capital to expand the business. Having an objective third party assessment can help you understand those opportunities and position the company for sale.

Once you have completed an assessment and you have a holistic view of your business, you can bring all of the pieces together in a succinct marketing package. Your business profile as well as your financial analysis and operational analysis are the keys to building a great story that will maximize the marketability of your business.

A key part of positioning your business for sale is understanding where your strengths lie as an owner. Understanding your business doesn’t mean that you are the best person to position your business and sell it. Before you go any further, stop and ask yourself two questions: if you had the opportunity to buy your business today, would you? Secondly, would it pass your due diligence?

For more information on how you can think like a buyer, contact Candace Enman at cenman@w-group.com. Stay tuned for our next blog in this series on clearing obstacles to a sale.

Candace Enman, President
W-Group Consulting