What do Buyers look for when purchasing a business?

April 19, 2021

We are business advisors who have helped hundreds of potential buyers every year, looking to buy successful, established businesses and conduct the due diligence for them as well.

Below is the list of items that business buyers normally pay more attention to:

1. Why is the Owner selling?

Talking to the owners about why they are selling can give an insight into the work-life balance they’ve experienced.

  • Are they exiting for more free time?
  • Maybe it’s time to retire?
  • Perhaps the business require new enthusiasm to take it to the next level?

2. Risks and Challenges

What risks does the business face and what have they found challenging?

  • How reliant is the business on the current owner?
  • Is there an established client base that has repeat transactions?
  • Will key staff remain when the business is sold?

3. ROI – Return on Investment

How did the current owners reach the Asking price?

  • They will want evidence that business is profitable.
  • Does it have a strong market position?
  • Are there loyal and experienced employees?

4. Better Lifestyle, Happier and Healthier

Some buyers are looking for change in their lifestyle and career.

  • Being their own BOSS may be what they are looking for
  • They don’t want the stress of building a business from scratch.
  • Maybe they are looking for someone else to manage the business for them?