Why most small businesses cannot be sold.
WHAT A BUYER IS ACTUALLY BUYING
Future profits they can earn without you.
WHY THAT PHRASE MATTERS
If the profits depend on you, there is nothing to sell.
WHAT MAKES A BUSINESS SALEABLE
It operates without the owner Customers are the business's, not the owner's Processes are documented Records are clean and verifiable Revenue is recurring or predictable There is a team Contracts and assets are properly held
WHAT MAKES IT UNSALEABLE
Everything depends on the owner Customers deal only with the owner No records, or records that cannot be verified Cash transactions not recorded Undocumented arrangements Assets held personally Licences not transferable
WHY UNRECORDED REVENUE IS FATAL TO VALUE
A buyer cannot pay for income that cannot be demonstrated.
WHAT OWNERS FREQUENTLY DISCOVER
That years of understating income has destroyed the value of the business.
WHAT TO DO ABOUT IT
Begin recording everything properly, years before selling.
WHY YEARS
Buyers examine several years of accounts.
WHAT TO ASSESS HONESTLY
Whether the business would continue if you were absent for months.
HOW TO TEST IT
Be absent, and observe.
WHAT TO BUILD
Independence from yourself, deliberately.
WHY IT MATTERS EVEN IF YOU NEVER SELL
It is the same work that makes a business manageable.
