The most intimidating aspects of selling your business are facing the barrage of questions during the various management presentations you’ll be doing for potential acquirers. The buyers will grill you on all facets of your operations. Of course, every meeting will be different, here are some questions you can expect will be asked by potential investors when you’re in the hot seat:
It’s a slippery question because if your business truly does have a bright future—and you want the buyer to believe that’s the case—the obvious question is: “Why do you want to sell it, and why to sell it now?”
The potential acquirer wants to find out if you have a predictable, economical and scalable formula for finding new customers.
The acquirer, with an eye to future growth, is trying to understand how big the potential market is for your product or service and what part of the field remains available to be harvested.
The acquirer wants to understand the breadth and depth of your team and determine specifically which members need to be motivated and retained post-purchase.
Strategic buyers will be searching for any possible synergies between what you sell and what they sell. The more you know about your customer demographics, the better the buyer will be able to assess the strategic fit. If your clients are other businesses, a buyer will want to know what functional role (e.g., training manager, director of sales and marketing) buys your product or service.
Buyers ask this question to size up the uniqueness of your formula for creating your product or service. Potential buyers want to know if you have any proprietary systems that would be hard for a competitor to replicate. For various reasons, they will also want to understand if the creation of your product or service is dependent on any one person.
A buyer is trying to understand how big is the moat around your business and what kind of protection it offers from competitors who may decide to compete with you in the future. What have you done to safeguard yourself against the competition?
Most buyers will try to understand how quickly they can integrate your back office into their operation. They’ll want to know what bookkeeping and billing software you use, how customers pay, and how you pay suppliers.
Of course, this is not an exhaustive list, but it’s a good start when you’re preparing to represent your company to your potential buyers.
Can your business survive without you?
If you wish to build up the value of your business and would want to explore what you could do to make it sellable, please do not hesitate to call Jean-Bertrand de Lartigue on +44 1656 766 363 or email him, email@example.com