Seller Hindsight

In our work with business owners to sell their business we have them put on the Buyer's Glasses to examine their business as if they are the buyer who is interested in purchasing it.

It’s an eye-opening experience and helps prepare a Seller to engage with buyers during negotiations. The Buyer’s Glasses exercise reveals some opportunities to prepare a business for buyer scrutiny and also reveals dynamics in a business that it’s simply too late to do anything about.

In looking at their business as a buyer it’s not hard for a business owner to see they could have taken different actions or made different decisions that would have increased business value. We often hear Sellers use the phrase “In hindsight I can see I should have…” Many of the hindsights they have are dynamics that have a negative effect on the price a buyer is willing to pay.

You can and should benefit from the hindsight of sellers that have gone before you! Here is our Top 10 List of “In hindsight I should have…” that we hear from Sellers.

In Hindsight: 

• Kept better financial records.
• Put in place systems so I wasn’t necessary.
• Gotten more testimonials from satisfied customers.
• Tracked my numbers better (sales, conversions, profits).
• Focused more on showing a steady pattern of growth.
• Not let my business decline because I was tired and looking to retire.
• Done more to distinguish my business from my competitors.
• Created a stream of recurring revenue.
• Kept my technology updated.
• Not continued to be the most important person in my business.

By examining your business from a buyers’ point of view it’s easy to see that:

• You should be the least important person in your business.
• Your business is more attractive if sales have been increasing for at least three years.
• Documented systems lessen dependence on any one person and provide a proven way of achieving results.
• Clean financial records give buyers confidence they can trust your numbers.
• Buyers love recurring revenue and will pay more for it, and banks will finance it.
• Costly upgrades to old technology will lower the price buyers are willing to pay for your business.
• If your business doesn’t stand out from your competitors, it won’t stand out to buyers.
• Telling buyers your customers are satisfied has less power than your customers saying it in their own words.
• Numbers speak at high volume to buyers! Quantification of lead generation, lead conversion and operating metrics get buyers’ attention – especially when they show growth and profit.

Don’t wait too late and find yourself looking back at what you could have been doing to make sure your business had maximum value when you were ready to sell. Start by learning the market value of your business, and dedicating part of your time to build a business of value that’s ready to sell when you are.