What makes a business worth buying? Here are 10 signs of a fundamentally strong small business, including cash flow, customers, employees and systems.
1. Consistent Cash Flow
Consistency reduces risk.
2. Repeat Customers
Customers who return are valuable.
3. Strong Employees
Good employees make the transition easier.
4. Low Owner Dependence
The business shouldn’t collapse when the owner leaves.
5. Good Reputation
A strong reputation is an asset.
6. Diversified Customers
No single customer should control your destiny.
7. Good Suppliers
Stable suppliers protect margins and operations.
8. Reasonable Capital Requirements
You don’t want every year’s profits going into new equipment.
9. Documented Processes
Systems make businesses transferable.
10. Opportunities for Improvement
A good business with fixable weaknesses can be a great acquisition.
Michael Shea represents the Tampa Florida Transworld office. In business since 2005, he has established a reputation as a trusted business broker across Florida’s key markets- from Tampa to Orlando, Melbourne, and more. Over the past two decades, Michael and his team have closed over $1 Billion in sold business volume and presided over more than 476 transactions. His credentials include the IBBA Certified Business Intermediary®, and most recently, the prestigious Certified Exit Planning Advisor® (CEPA) credential. He is also a Florida Licensed Real Estate Broker and Business Brokers of Florida Board Certified Intermediary . Shea is a member of the VRMA and a recognized expert in property management and vacation rental management business sales