Build Business Value Before Selling A Business

I normally write about selling strategies, today, is no different. I'm sharing insights on how you can improve your success at selling a business. As you read this, try to take the buyers perspective.

We sold our home a few years ago. Like most home owners, we wanted to maximize the value of the property and increase our Return On Investment (ROI). We took the advice of our Realtor and invested in key areas of the home to make it stand out in the neighborhood. We replaced carpeting, updated appliances, painted the inside and outside and improved the landscaping. Our efforts paid off handsomely. The home sold quickly and we had several excellent offers.

Savvy business owners, who want to sell a business, want to maximize the business value. Business owners must improve the profit value of the business to make it attractive. Most business buyers are looking for businesses with significant potential and rising sales. Many of them are looking for turnkey operations they can operate for a profit. No one wants a business that doesn't have good operational systems unless, they are looking for bargains. In some cases a business owner must improve several systems of the business to make it much more attractive to potential buyers. It is best to approach these areas well before posting the business for sale.

If we had attempted to sell our home before the improvements were completed, we would never have reached the high selling price we achieved. In outside sales, a salesperson must improve the looks and appeal of the service or the product they are selling. If we can't improve the value proposition, we won't be able to convince the buyer that our product or service is worth more than competitors.

Business Systems Will Improve Sales Value

One of the reasons franchises sell for higher prices is the perception that successful systems are in place. Look at Mc Donald's or my favorite hamburger place, In-N-Out. The hamburger system runs like clockwork and it is always a treat to savor the taste of a double, double hamburger. When you watch the people at an In-N-Out make the fries or the burgers, you know they have a well honed system. You also know the meal is freshly made to perfection.

If you plan to sell a business, there are key areas of buyer evaluation. Buyers are looking for Financial, Operational, Marketing and Sales systems that work seamlessly. One of the areas I want to point out is how a selling system can add significant buyer value.

If a business has a marketing and sales system that builds and strengthens customer relationships, it improves value. However, this can't be based on something that could leave after the business is sold. For example, if the business has a salesperson responsible for building and maintaining key accounts, a new owner may perceive this as a liability instead of an asset. If the business has a selling system that is supporting the salesperson, this is definitely an asset to the business. The same is true with the production or operational systems of a business. Instead of listing a key employee who is the only one who knows how to run a complicated piece of equipment, a business seller would be wiser to invest in and promote a simple and efficient production system anyone can operate.

About the Author
Steve Martinez, Selling Magic Mastermind and Sales Process Automation Guru. Visit Steve's web site at