11 Characteristics of the “Perfect Business”

Aug 14, 2023Buying Businesses, Selling Businesses

The most asked questions of business buyers and business sellers?

The questions are different, but my response is the same.

BUYER: “What are the things I should look for in a business to buy?”

SELLER: “What can help make my business more valuable now so sell in the future?”

My response:

  1. Operating margins above industry standards.
  2. Stable and motivated management team.
  3. Documented operating systems.
  4. A diversified customer base with no single customer representing more than 25% of overall revenue.
  5. Realistic growth strategy.
  6. Accurate and accessible financial records.
  7. Business is not solely reliant on the owner to generate revenue.  The goodwill of the company is not tied directly to the owner.
  8. Business is not solely reliant on 1 or 2 vendors.
  9. The owner is paid a fair market wage for time.
  10.  A high barrier to entry into the industry.
  11. Know your competition.  What market share do you own?