There are a lot of people with a lot of money at the moment (in Australia anyway) and they are looking for
low risk high return investments (aren’t we all?). A good small or medium size business can offer what
they are looking for.
Think about it. A business with a track record of turning in a maintainable net profit of $250,000 per annum
for say, 3 years or more – and being offered for $625,000 – will potentially give the purchaser a return on investment (ROI) in 2 1/2 years. After 3 years the buyer has got his money back and can sell the business
for what he paid for it (or more if they have grown the business). They’ve doubled their money in 3 years!
What other kind of investment gets that sort of return.
To attract an investor buyer, your business will need to have a good track record, clean and detailed
financials, and be in a market that is low risk and likely to return the same maintainable net profit. The risk
to the maintainable net profit will affect the price the business will sell for. The lower the risk, the higher the
value. A business running well under management will be even more valuable to an investor buyer.
Would your business be attractive to an investor buyer?