As risk increases, value decreases. We talk with business owners daily who believe a buyer will pay a certain amount for their businesses. However, buyers have a different perception of its value. As Michael Marks depicts in the above tip, many owners fail to sell their businesses at the price they want, in the time they want, and to the type of buyer they they want. Without preparation and understanding, the expectations are not met and unfortunately, many businesses do not make it to the closing table.
So, what increases value and decreases risk? What do buyers focus on to figure out how risky a business is? They look at financials (preferring growth with increasing revenues and bottom line), a management team in place with the owner taking long vacations, good systems and processes and a history of success etc. Although these are a few of the issues that can mitigate or decrease risk in a buyers mind, there are many more. A good plan will help you reach your goals.