When Selling Your Business, Think Like a Buyer, with Bill McDermott, Host of ProfitSense
In this commentary from a recent episode of ProfitSense, Bill McDermott discussed how to think like a buyer when preparing to sell your business.
Bill’s commentary was taken from this episode of ProfitSense.
ProfitSense with Bill McDermott is produced and broadcast by the North Fulton Studio of Business RadioX® in Alpharetta.
TRANSCRIPT
[00:00:00] Bill McDermott: So I want to take a moment and talk to my business owner audience on if you’re selling your business or transitioning ownership whether it be to coworkers or a potential strategic or financial buyer,
[00:00:16] Bill McDermott: we have to think like buyers. Every business owner has a big dream to sell their business, achieve financial freedom, and live life on their terms. But recent studies show that business owners have a concept of the value of their business, but less than half of those have obtained an independent valuation.
[00:00:35] Bill McDermott: How do we know our value corresponds with the market value to a buyer? Selling our business is a lot like selling a home, except the business values are usually much higher. Everyone knows that kitchens and bathrooms sell houses. Location is also critical. Typically to maximize the value, we don’t sell our house ourselves,
[00:00:57] Bill McDermott: we hire a professional agent. They come up with a listing price based on comparable sales and run a process. In the same way, when selling our business, it’s important to think like a buyer. This means understanding what buyers are looking for in a business and how we can position our business to be attractive to potential buyers.
[00:01:18] Bill McDermott: Number one, identify your ideal borrower. Who is our ideal borrower and what are their goals or pain points? Knowing who we’re selling to, we can tailor our marketing materials to appeal to them. Second, Prepare a business for sale. This means cleaning up our financials, updating our marketing materials, and getting our business in top shape.
[00:01:40] Bill McDermott: Many business owners don’t know where to start or what to do in these areas, so hiring a professional to help you is critical. Third, hire a business broker or an M& A advisor. Best to have an independent advisor to handle the marketing of our business, finding potential buyers, and negotiating deal points.
[00:02:03] Bill McDermott: By following these steps, you can increase the chances of selling your business for a fair price and to a buyer who is a good fit for the company.
About ProfitSense and Your Host, Bill McDermott
ProfitSense with Bill McDermott dives into the stories behind some of Atlanta’s successful businesses and owners and the professionals that advise them. This show helps local business leaders get the word out about the important work they’re doing to serve their market, their community, and their profession. The show is presented by McDermott Financial Solutions. McDermott Financial helps business owners improve cash flow and profitability, find financing, break through barriers to expansion, and financially prepare to exit their business. The show archive can be found at profitsenseradio.com.
Bill McDermott is the Founder and CEO of McDermott Financial Solutions. When business owners want to increase their profitability, they don’t have the expertise to know where to start or what to do. Bill leverages his knowledge and relationships from 32 years as a banker to identify the hurdles getting in the way and create a plan to deliver profitability they never thought possible.
Bill currently serves as Treasurer for the Atlanta Executive Forum and has held previous positions as a board member for the Kennesaw State University Entrepreneurship Center and Gwinnett Habitat for Humanity and Treasurer for CEO NetWeavers. Bill is a graduate of Wake Forest University and he and his wife, Martha have called Atlanta home for over 40 years. Outside of work, Bill enjoys golf, traveling, and gardening.
Connect with Bill on LinkedIn and Twitter and follow McDermott Financial Solutions on LinkedIn.
