Business Brokering Buy Sell Business – Worldwide Business Brokers

Selling a Business: What Buyers Look For

Selling a Business: What Buyers Look For

13 September 2021: Selling a Business

Are you thinking of selling a business? If you’re a business owner, a business broker or even a real estate agent that wants to list a business for sale, wouldn’t it be nice to know what buyers are looking for?

Of course it would! Knowing what buyers are looking for sure would make selling a business easier!

Well, if you haven’t heard this before, let me introduce you to an expression that is one of the most profound truisms ever uttered: “If it was easy, EVERYbody’d be doing it!”

But before we can figure out what buyers look for, we have to recognize that there are different types of buyers for different types of businesses. This suggests that you might need to know what kind of buyers are likely going to be looking at the business you’re selling before you can determine what they’re looking for.

Types of Buyers

I’ve written and spoken often about the need to know your buyer and it’s a critical part of selling a business; it’s also a significant part of how professional business brokers find the right channels to market to. Without giving this aspect of the process the attention it needs, you’ll most likely be paddling upstream for quite some time.

As I mentioned, buyers differ – but they fall into two broad categories: financial and strategic. They often have different objectives and therefore look for different things in an acquisition.

Smaller businesses – those in the so-called Main Street Market – generally attract financial buyers. By “Main Street Market”, I’m referring to businesses that have transaction values of less than $1 million or $1.5 million. Buyers of these businesses are generally most interested in the answer to this question: “How much money will this business put in my pocket?”

Larger businesses – those in the Middle Market with valuations north of $1.5 million or $2 million – are sometimes the targets of strategic buyers. Such buyers often are more interested in how the acquisition of the target business will impact their ability to grow their existing business by, for instance, acquiring a coveted customer list, enter a new geographic area, adding a product or service, or simply growth through acquiring a competitor.


Our course, “Learn How to Value and SUCCESSFULLY Sell Businesses, teaches you how to value and sell businesses.

Become a Professional Business Broker…

Knowing what these different buyers look for takes training and experience. And in many cases, what’s valuable to any given buyer can be pretty arcane and individualized.

Trying to identify all the possible disparate aspects that specialized buyers might look for in any specific acquisition is impossible without knowing the business and developing a buyer avatar. But there are basic elements that are pretty much the same no matter the business’s size, market or type of buyers.

In our Course, “Learn How to Value and Successfully Sell Businesses”, there is a section on managing the client’s expectations. In that section, we advise owners, Realtors and others that want to know how we do this on how to prepare themselves or their selling clients for what to expect during the selling process. We give particular attention to what we know most buyers will want to see – and that we should control the release of all information and that any information released should be done on a schedule related to the stages of the process.

We’ve launched a coaching program specifically tailored to Realtors that want to sell businesses, business owners and to anyone that wants to become a business broker.

If you’d like to learn more, email me at jo*@Wo*******************.com

Short of providing the entire module of our Course that addresses this issue, it isn’t possible to include everything buyers look for in a single blog post but here is a list of the most general items that buyers of nearly any business will want to see.

  • Clean books. Financial statements and tax returns that are clear, comprehensive and easily understood by most people with a modicum of financial and mathematical comprehension. If it takes a professional business broker to explain the financials or an Einstein to understand them, we’ve got a problem. The seller MUST have clear, clean and coherent financial statements for the business if they expect a timely and relatively painless sale.
  • Copies of all contracts. This includes not only vendor and customer contracts but also employment contracts, equipment leases, real estate leases, loan docs and any documentation for anything that binds the business in any way.
  • Clean facilities. It may sound trite, but clean and organized facilities suggest an organized business. When explaining this to a seller, equate it to buying a house. If there’s a bunch of junk in the front yard, a couple of rusted-out hulks of long-dead Chevy pickups on blocks out back, half-empty pizza boxes on the living room floor and moldy cheese in the fridge, the chances of a sale are slim. The chances of a sale at anywhere near the value of the property – or the business, in our case – are near zero.
  • Employment contracts. Buyers will want to see that the business’ key employees are tied to the business for a reasonable period of time and such contracts should contain non-compete clauses.
  • Representations and warranties. Buyers will want the seller to assure them about certain conditions of the business such as that no taxes are overdue, no lawsuits are threatened or filed, no environmental issues exist. If any such issues are present, they should be resolved or mitigated before coming to market.

This is by no means intended to be an exhaustive list but meant to illustrate some of the myriad topics we have to discuss with our selling clients to prepare them for what a buyer will be looking for.

The Bottom Line

We’ve seen sellers get their backs up when buyers continuously ask for this or that documentation during the due diligence period. And when the financials are not clear, this would occasionally include requests for such seemingly mundane items as bank statements – for the past THREE YEARS!

When that happens, we have to explain to the seller that we’re asking the buyer to hand over a substantial amount of their money and we then ask the seller, “If you were asked to hand over $XX million, wouldn’t you try to make sure you knew what you were buying?”

Preparing our selling clients for this process begins at one of our earliest meetings – sometimes even before we accept the listing engagement. Doing so helps to lessen any surprises down the road – and occasionally shines a light on a problem that would not otherwise have been disclosed until the last minute – when it could derail the whole deal.

If you have any questions or comments on this topic – or any topic related to business – I’d like to hear from you. Put them in the comments box below. Start the conversation and I’ll get back to you with answers or my own comments. If I get enough on one topic, I’ll address them in a future post or podcast.


This week the inquiry we received is similar to last week’s “Searching” item. As with many recent inquiries, it came from a small private equity fund looking for B2B opportunities. The examples they used included janitorial, security, lawn care, property management, and fire protection with sales of between $3 million and $30 million. If any of you know of something that might fit, please let me know.

I’ll be back with you again next Monday. In the meantime, I hope you have a safe and profitable week.


#business #businessacquisition #sellabusiness #becomeabusinessbroker #businessbrokering #businessvaluation #MergersandAcquisitions #buyabusiness #sellabusiness #realtor #realestateagents

The author is the founder of Worldwide Business Brokers and holds a certification from the International Business Brokers Association (IBBA) as a Certified Business Intermediary (CBI) of which there are fewer than 1,000 in the world. He can be reached at jo*@Wo*******************.com

Leave a Comment

Your email address will not be published. Required fields are marked *