10 Ways to Increase Your Odds of Getting an Offer

The Sellability Score is an extremely valuable pre-sale planning tool for business owners to help assess the current "sellability" of their business. 

 

In the fall of 2012, the Sellability Score researchers analyzed data from users over the past 12 months.  The research team compared the data provided by users that had received an offer to buy to data provided by users that had not received an offer to buy.  The sample included 2,300 companies from around the world, with the majority of users being from Canada, US, UK, Australia and Ireland. [1]
 

The results reveal an interesting picture of the qualities and attributes acquirers look for in a business.  Focusing on the factors that are more closely linked to getting an offer will help increase the odds of attracting numerous suitors for your business.  The 10 factors that will increase your odds of receiving an offer for your business include:

The business can survive without you – you are twice as likely to get an offer if your business can operate and thrive without you
Your top sales person is replaceable – you are twice as likely to get an offer if you could easily replace your most important sales or marketing person
You are personally responsible for less than 75% of your sales – you are half as likely to get an offer if you are responsible for more than 75% of sales
Your top product/service design and delivery person is replaceable – you are almost twice as likely to get an offer if you could replace your most important product/service design and delivery person
Your annual revenues are over $3 million – companies with annual revenues over $3 million are twice as likely to get an offer compared to businesses with annual revenues below $500,000
Your key suppliers are replaceable – you are almost twice as likely to get an offer if you could replace a key supplier
Your business has a formal management team – you are almost twice as likely to get an offer if you have a management team as opposed to being a sole owner operator
More than 25% of your revenues are recurring in nature – you are more likely to get an offer if you have created a recurring revenue stream
Your business has over 10,000 followers – you are almost twice as likely to get an offer if you have more than 10,000 followers (i.e. aggregate of e-mail subscribers, Twitter followers, Facebook fans, Google + connections or LinkedIn connections)
You are younger than 33 years of age – although beyond your control, younger owners were twice as likely to get an offer than mature owners (it is speculated that this occurs in instances where the purchaser is interested in acquiring a company for the people or ‘talent’ building the product)

You may not be looking to sell your business today.  However, more than 310,000 businesses in Canada are poised to change hands over the coming five years.  The increasing supply of businesses for sale will create a buyer’s market putting downward pressure on sale prices over this time period.  The Sellability Score can provide you with vital information needed to command a premium price when it comes time to sell your business, especially in a competitive buyer’s market. 

 

Visit us at www.vspltd.ca or http://www.sellabilityscore.com/vsp/jason-kwiatkowski to find out your company’s Sellability Score.

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1.  Sellability Tracker Q4, 2012 – Increasing Your Odds of Getting an Offer.