Is your business an attractive target? How to catch a buyer’s eye…
When a buyer is interested in acquiring a company, there are several key factors they will consider to ensure they are making a solid investment with as little risk as possible.
The most important of those factors is usually the financial performance of the company. At the heart of this is a strong track record of profits, ideally year-on-year, as well as revenue growth and a positive cashflow.
As a business owner, you need to be able to demonstrate this through financial statements and tax returns, which a buyer will want to study in depth as part of their due diligence process.
It does not only apply to the company’s past and present performance either. Buyers will also want to see forecast projections.
If you are a company owner who is thinking about exiting your business, you may have some concerns about exactly what you need to do to make sure everything is ready to be presented to a potential buyer. We strongly recommend seeking the expert help of an adviser such as KBS Corporate who can ensure this process proves to be smooth and straightforward.
We can showcase your company in the best light by highlighting its key value drivers.
Market position
The next area potential buyers will study is the company’s market position. What they will be looking for is that the target company is positioned strongly and has distinct advantages over its competitors.
Factors within this include sustainable market share, a unique selling proposition, and the loyalty and size of the customer base.
Buyers will also look for positive online reviews and testimonials, and high customer retention rates.
Many buyers look for businesses operating within a distinct niche in the market, while companies with a strong brand are also very appealing.
Operational strengths
The final key area to which acquirers will pay close attention is the operational functionality of the company.
Central to this is the workforce, including senior management. Having high quality, experienced staff, in a streamlined structure, can greatly enhance the appeal of a business.
Making sure this is in place, along with strong leadership, can make the transition to new ownership much easier, and reduce the risk of teething troubles when the company changes hands.
Of course, the buyer may well be keen on the idea of a handover period in which the vendor stays on for a few months to smoothen the transition.
On a more technical level, a buyer will look at the efficiency of processes, systems and technologies that are in place.
And arguably the most important aspect in this area is that a buyer will certainly be looking for a well-run business which has the potential for growth and scalability.
A key preparation for business owners to make is to illustrate a strong track record of operating with an efficient cost structure.
Buyers are looking for companies that have opportunities for expansion, whether that is through new products, markets or operational improvements.
A well-defined business model with minimal risks will also help to boost a company’s chances of attracting a larger pool of potential acquirers – and a higher sale value as a result.
Strong IP assets, such as proprietary technology and trademarks, also appeal to prospective buyers.
Our buyer reach
At KBS Corporate, we have been successfully finding buyers for companies for over 25 years, across the full range of industries and sectors.
Those buyers come from all over the world. We work with trade acquirers, private equity firms and institutional investors on every type of transaction, including MBOs, MBIs and Employee Ownership Trusts.
Our buyer reach is unmatched in the industry, thanks to the technology we have developed ourselves, the network of connections we have built up over the years, and the skill, experience and dedication of our team – who know exactly where to look to find the perfect buyer for every company, and explore every avenue to help answer the question, how do I sell my business?
Get in touch today to find out how we can help you achieve your goals.