Why would someone buy my business when they can start their own?
I had an interesting discussion recently with a garage door company. The owner had started the business 2 years prior and had earned $38,000 in the first year and $65,000 in the second and was growing. He runs it from home, so his overheads are low and he does all of the work himself, effectively just taking orders and project managing installs from his suppliers, ensuring the customers are happy. He has now been offered an overseas opportunity he is keen to take and needs to exit in 3 months.
His view was “anyone could start this business and have it to this level after two years so why would anyone buy it?”
So why would someone buy this business?
- The owner has built an interesting and proven business model, where he effectively focusses on an area where the garage door manufacturers are not good, namely lead generation and conversion and project management.
- Lead generation through Facebook and web traffic
- A website with 2 years SEO behind it
- Sales scripts to help close deals and win new customers.
- The business requires no operating capital.
- Established supply chain and
- Procedures on how to conduct the work.
- Several builders who are repeat customers, ensuring an ongoing steam of business.
- 5 Star Customer Reviews that build trust with new potential customers.
- And the golden goose, ongoing positive cashflow
By his own experience the owner can see it would take at least two years to duplicate and during that time the new owner would be earning less and accepting far more risk than purchasing the existing business.
After walking through the 10 points above with the owner, he could see how any buyer would see real value!
The great thing is by doing this exercise you have taken a big step forward to helping market your business to would be purchasers and increased the potential of a sale and the value thereof.
If you think your business might be unsaleable, check out our post on saleability by clicking here.
So don’t be too quick to think “why would someone buy my business when they can just do it themselves?”.
Believe it or not, most people don’t have it in them to start their own business and will gladly pay you for all of your hard work.
If you want some advice around the saleability of your business, don’t hesitate to send us a message.