Plan Smart, Exit Strong (6 of 6) – Your Sale vs. the Competition: Positioning for a Successful Exit
Plan Smart, Exit Strong (6 of 6) – Your Sale vs. the Competition: Positioning for a Successful Exit
Selling Your Business? You’re Competing – Whether You Realize It or Not
When it comes time to sell, your business doesn’t stand alone. It’s one of many on the market – and buyers are choosy. Some owners are walking away with premium offers, while others are struggling to attract serious interest. What makes the difference?
It’s not just profitability. It’s transferability – a buyer’s perception of how easily the business can continue operating without the current owner. Transferability reduces buyer risk, and in competitive markets, lower risk translates to higher offers.
Profitability Gets You Noticed. Transferability Closes the Deal.
Buyers care about earnings, that’s true – but only if they can trust those earnings will continue after the ownership transition. A highly profitable business that relies heavily on the current owner is risky. On the other hand, a slightly less profitable business with strong systems, a capable team, and clear documentation is far more appealing.
Buyers are asking:
- Is this business easily transferrable to the next owner – i.e., me?
- Will customers, employees, and vendors stick around?
- Are processes and relationships documented and repeatable?
- Can I build on what’s already working?
If the answer to those questions is “yes,” you’re not just selling a business – you’re selling a reliable, income-generating machine. That’s what brings premium offers.
According to the 2023 Minnesota State of Owner Readiness Report, 80% of business owners plan to exit in the next decade – but only 20% – 30% of businesses that go to market will actually sell. Most often, the gap isn’t due to a lack of profitability. It’s a lack of transferability.
The Risk of Overlooking Transferability
Imagine two businesses, each generating similar revenues. One is owner-centric, with key knowledge and client relationships tied up in the founder’s head. The other has documented processes, a trained team, and clear growth systems in place. Which one would you buy? Which one would you pay more for?
The better-positioned business wins every time – not necessarily because it earns more now, but because it will be easier to grow and manage in the future.
Building Transferability Takes Time – And It Pays Off
If you wait to clean up your business until you’re ready to sell, it may already be too late to maximize its value. Strategic positioning takes time, but the payoff is worth it.
That process often includes:
- Strengthening your management team
- Documenting processes and key relationships
- Diversifying revenue and customer base
- Reducing owner dependency
- Highlighting future growth opportunities
These steps increase buyer confidence – and with it, the likelihood of a successful sale at a higher valuation.
Think Like a Buyer. Plan Like a Seller.
Would you pay top dollar for your business today? More importantly, would a buyer feel confident it will continue to perform once they assume operations? Those are the questions to ask now—not after listing it. Think of profitability as the treasure, and transferability as the treasure map.
Position Yourself Well to Sell
At Headwaters Strategic Succession Consulting, LLC, we help business owners plan and position for a strong exit – whether that’s today, next year, or five years down the road. The sooner you start, the more options you’ll have. By balancing profitability with transferability, we help owners stand out in a competitive market, attract serious buyers, and sell on their terms – not someone else’s.
Ready to see how your business stacks up? Let’s talk soon!
Download the 2023 Minnesota State of Owner Readiness Survey HERE.
About the Author: Douglas Cook, CEPA® is a Certified Exit Planning Advisor, Business and Commercial Real Estate Sales Professional, member of Exit Planning Institute Twin Cities Metro Area Chapter and Owner/Senior Value Advisor at Headwaters Strategic Succession Consulting, LLC. Headwaters specializes in business valuation, exit planning, business brokerage and commercial property sales
It can be too late to start that planning, but never too early. Don’t run out of time!
Schedule a private call with Doug
Douglas Cook is a Certified Exit Planning Advisor (CEPA) and is the Senior Value Advisor at Headwaters Strategic Succession Consulting, LLC. He specializes in helping business owners formulate exit strategies while helping to increase the transferrable value of their companies.
