The longer the present owner has been in business, the more likely he or she has been successful. People don’t stay in business if they are not making money.

Buyers are looking for valid reason for selling a business. Retirement, health, divorce, serious life changing events and legitimate career changes are good reasons. Short-term ownership, profitability or other business problems are warnings to serious buyers.

There are three things a Buyer has to get out the deal, or they won’t buy your business, if there is no: (1) enough money to service the debt they incur in buying the business, (2) enough left over to live, and (3) a decent return on the cash they invest in the business.

There are four basis questions that every Buyer asks: (a) if this business is so good, then how come they are selling it? (b) How much money does it make? (c) What’s the upside potential, or is it going to lose market share, when I own it? (4) Where the heck did you get that price? Everything else is secondary.

At the end of the day, the secret to selling a business is the Buyer’s cash-on-cash return on investment. That is, how fast the Buyer can get the cash back they invest in the business.

Clear and concise financial records are important. How well the company is maintained to a budget and how consistently the budget if followed is very important. There should be two financial programs in place for every business. The internal financial statements that are used to operate the business and the annual tax returns. All items should be explainable and if income re-casting is required, it should be measurable within the statements. If the buyer detects any miss-information credibility is lost and the sale is lost with it. Don’t hide anything from the process because it will only create problems.