How Dependent on You is Your Business?
Sept. 14, 2014
When it comes to selling a business, there are many factors that play into how much a business is worth, and how eager prospective buyers will be to put in an offer.
There are many obvious ones, such as size of the customer base, stability of employees, age of technological equipment, etc. One of the less obvious factors, however, is how important you are to the business.
Take, for example, someone who built a web-only business that takes online orders and emails out PDF guides and manuals. Compare that to a graphic designer who built a business selling their own specific art style. In one of those businesses, the presence of the owner is crucial; in the other, not so much. Which do you think would be more valuable to a prospective buyer?
The former is definitely more valuable to a buyer, as there would be a small interruption in business-as-usual, as opposed to a massive shakeup.
The good news is that, even if your business is highly dependent on you, knowing what a buyer will be looking for enables you to try to fix the issue. You could start transferring responsibilities to other employees, or starting to offer more standardized package products, or even using technology to manage some of the personal touches you were putting in. No doubt none of this will be an easy solution, but to sell a business, you optimally want to make the transition as easy on the buyer as possible.
There may not be a one-and-done simple solution, but if you talk with your business attorney about these issues, they will be able to offer you advice and help you take steps down the right path.