3 criteria that make a company attractive to a buyer

Three Key Aspects That Make a Company Appealing to Potential Buyers

Are you planning to sell your business and are curious to know what are the three main aspects that make a company appealing to potential buyers?

In late 2019, Infopro Digital Etudes posed this question to a diverse group of business buyers, sellers, and those interested in acquiring a business. Three fundamental elements emerged as the top picks.

Growth Potential Outweighs Financial Profitability

55% of survey participants believe that the primary factor that makes a company appealing is its growth potential. This consideration takes precedence over the company’s financial profitability (37% of respondents) or its financial value (25%). Buyers concentrate on the company’s future prospects within its market and environment, considering both medium and long-term potentials.

Interestingly, 80% of them acknowledge that the guidance of business transfer professionals influences or would influence their decision to acquire a business. They deem it critical to assess this “potential”. They desire to ascertain whether the company they are eyeing possesses the necessary assets for growth and job creation. Actoria, with its market expertise and extensive networks, can provide valuable advice on evaluating a company’s potential.

The Significance of Human Resources

The third most common criterion cited by buyers and sellers regarding what makes a company appealing is the existing team, human resources, and accumulated expertise. These aspects become even more crucial in the context of small businesses where key functions depend on a handful of skilled individuals.

Beyond the individuals who constitute a company, the buyer once again thinks in terms of potential. Do I have the human resources capable of driving the company towards its intended direction? Towards a new challenge? The crux lies in the ability of the people to successfully navigate this transition and the subsequent growth. The buyer needs to identify the talents within the company they wish to acquire (92% of respondents consider talent as a primary influence in their acquisition decision).

The Influence of Regional Attractiveness

The top three aspects that make a company appealing are its growth potential, financial profitability, and the value of its human resources. Contrary to other studies, the respondents in this survey were also questioned about their connection to the region where the target company operates. Only 8% of respondents stated that this aspect had a primary influence on their choice. It’s primarily the attractiveness of the region that determines their decision (accessibility, mobility, employment opportunities, tax benefits). 71% of respondents consider this factor as being of primary importance.

With over 25 years of experience as a specialist in business transfers, our network of regional experts is ready to meet your needs.