For many business owners, exiting their company is a once-in-a-lifetime event — yet far too few prepare for it early enough to maximize value. Whether you’re planning to sell soon or simply want to build a stronger company, understanding what buyers look for is essential to achieving a successful transition.
Key Value Drivers
Buyers are most focused on profitability, recurring revenue and owner independence. They want to see consistent revenue, reliable profit margins and clean financial records. Just as importantly, they want a business that doesn’t rely on the owner to operate day to day. If you’re still the go-to for every client issue or decision, it’s time to create systems, build leadership within your team and delegate critical functions.
Recurring Revenue & Customer Loyalty
Recurring revenue — such as service contracts or subscription-based models — adds predictability and reduces buyer risk. Customer loyalty also plays a big role. A strong reputation and a base of returning customers can significantly increase your company’s marketability and value, especially when supported by consistent customer feedback or reviews. Buyers want to see that customers are not only satisfied but likely to remain with the business after the transition.
Avoiding Common Mistakes
Owners often wait too long to start exit planning. Others rely too heavily on themselves to keep the business running or fail to maintain clear financials. These factors can reduce buyer interest and lower the sale price. Avoid these pitfalls by organizing your books, transferring key relationships to your team and ensuring your business can thrive without you — even in your absence.
Taking time now to improve these areas can lead to a smoother, more rewarding exit down the road.
Ryan Armstrong, CBI, is president of Transworld Business Advisors Phoenix
