When selling your business, it’s important to understand there are two types of potential buyers – the Financial Buyer and the Strategic Buyer.
How The Financial Buyer Thinks:
- Evaluates the worth of your business based on your profitability.
- Looking to pay today for a stream of profit in the years to come.
- For each year they must wait before realizing a profit, they discount profit projections by as much as 15%.
How The Strategic Buyer Thinks:
- Develops an offer based on the value of your company once it’s in their hands.
- Looking for businesses they can integrate with their own to expand their product offering or to access a new market.
- They’re likely your competitors, your suppliers, or customers of your business.
No matter which type of buyer your business attracts, it’s smart to take steps to increase its value about a year or two before you list it for sale.
Next Up: 8 Tips On How To Boost The Value Of Your Business Before You Sell.