What Buyers Look for in a Small Business: Insights to Help You Sell Faster
At McKinley Holdings Group, we’re not just here to talk about buying small businesses—we’re actively looking for them. Whether you’re ready to move on to the next chapter or looking to capitalize on the hard work you’ve put into your business, understanding what we (and other buyers) value can help you position your business for a faster sale. Here’s what we’re looking for in potential acquisitions and how you can make your business stand out.
Clear Financial Records Are a Must
When evaluating a business, the first thing we look for is a clear and comprehensive set of financial records. This helps us assess your business’s stability, profitability, and growth potential. Accurate and transparent financials give us confidence in your operations and make negotiations smoother.
Real-World Example
We recently acquired a local service-based business that had immaculate financial records, including profit and loss statements and tax returns. The transparency of their records allowed us to quickly assess the value of their business and close the deal efficiently.
Pro Tip: Ensure your financial records are up to date and well-organized. For insights into how financials impact business value, check out our blog on Factors Affecting Business Valuation.
A Loyal Customer Base Adds Value
A business with a loyal and repeat customer base is highly attractive. Buyers value businesses with established relationships and recurring revenue streams because they minimize the risk of losing income after the acquisition.
Real-World Example
One of the businesses we acquired—a boutique retail store—had a strong local following and a customer loyalty program that generated consistent repeat business. This aspect made the business a standout candidate for acquisition.
Pro Tip: Highlight customer loyalty metrics, such as repeat purchase rates or online reviews, to show your business’s ongoing value. Learn more about maintaining strong customer relationships in our blog on Selling a Family-Owned Business.
Growth Potential Is Key
We’re not just interested in what your business is today—we’re also focused on what it could become. Showing us untapped markets, opportunities for product expansion, or operational improvements can significantly increase your business’s appeal.
Real-World Example
A small manufacturing company we evaluated had an underutilized e-commerce platform. By expanding their online sales channels, we saw a clear path to growth, making it an attractive acquisition.
Pro Tip: Prepare a business plan that outlines potential growth opportunities. Need help crafting your exit strategy? Check out our blog on Small Business Exit Strategy.
Operational Efficiency Reduces Risk
Streamlined operations make your business easier to transition to new ownership. We look for businesses with documented processes, efficient systems, and a well-trained team—all indicators of operational health.
Real-World Example
A logistics company we acquired had well-documented workflows and cross-trained employees, which made the transition seamless. These factors reduced risks and increased the business’s attractiveness to us.
Pro Tip: Document key processes and ensure your team is capable of maintaining operations without your direct involvement. For more tips, read our blog on How to Sell a Small Business Without a Broker.
Low-Risk Profiles Are Ideal
We’re drawn to businesses with minimal risk factors. High turnover, dependence on a single client, or legal issues are red flags. Addressing these risks before approaching buyers like us can significantly improve your business’s marketability.
Real-World Example
A consultancy we acquired had a diversified client base and long-term contracts in place. These factors minimized risk, making the business a strong candidate for acquisition.
Pro Tip: Conduct a risk assessment to identify and address potential issues. Learn how risks impact valuation in our Factors Affecting Business Valuation blog.
Why McKinley Holdings Group Wants to Hear from You
At McKinley Holdings Group, we specialize in acquiring small businesses and helping owners transition seamlessly to their next chapter. We’re looking for businesses with clear financial records, loyal customer bases, growth potential, efficient operations, and minimal risk. If your business checks these boxes, we want to hear from you.
Explore more resources like Best Practices for Selling a Small Business to learn how to prepare for a sale. Ready to take the next step? Contact us today to start the conversation.
Final Thoughts
Knowing what buyers like McKinley Holdings Group look for can help you position your business as an attractive acquisition. By focusing on transparency, customer loyalty, growth potential, and operational efficiency, you can increase your chances of securing the right buyer.
If you’re considering selling your small business, let’s talk. Get in touch with us today to explore how we can help make your transition seamless and rewarding.
