Creating a Good Business Listing
Creating a good business listing is the critical first step when trying to sell your company. The business listing describes your business, products and services, and other important details. Sometimes referred to as a teaser or selling memo, it is often the first point of contact with potential buyers. It therefore serves a critical purpose in helping your business stand out from the crowd, attract serious buyers, and kick off a successful sale process.
Attracting Serious Buyers
Attracting serious buyers is a serious business, which is why you should create a professional business listing. To make a good business listing, make sure to include:
- A catchy title
- Professional-looking photos
- A detailed business description
- Key financial information
- An overview of key products and services
- A discussion of the competitive position and future opportunities
- A fair asking price
The more detailed your listing, the more serious buyers you’ll likely attract. At Firm Exchange, our unique rating system, the Listing Completion Rating (LC Rating), emphasizes information transparency to help good business listings stand out from the crowd. The reason is simple, we believe the best listings should get the best placement, not who pays the most.
Focus on Exciting Features
Any company that’s survived is doing something right – even if there are problems. There’s nothing wrong with promoting the best parts of your business. These features might be your loyal customers, growth rate, or profit margin. You might have little or no competition in the area. Maybe you’ve recently remodeled or upgraded equipment. These are all things you can promote in your listing.
Perhaps your company is strong in strategy and operations. Maybe you’ve got top talent working for you, or you might own patents to products that are trending well in the market. Your channels of distribution might be incomparable and worthy of mention. This is the area where you generate excitement about your business, so it’s important to evaluate your company honestly and highlight the most appealing features to get potential buyers excited about the business.
Write a Professional Business Listing
Creating a good business listing depends on dozens of pesky details such as spelling, grammar and organization. First impressions matter – they’re the engine that attracts buyers and builds momentum. Ideally, a favorable first impression can get the train rolling and make it hard to stop. That’s why it’s so important to proofread your listing and get professional writing and editing help if needed.
You also want to ensure that your photos, videos, and graphics are of the highest quality. Keep in mind that extravagant graphic bells and whistles can detract and confuse readers. Also be sure to use high-quality images, clear organization, and proper spelling and grammar. Many sellers have put a lifetime’s work into their businesses. It’s important to give your business the respect that it’s due with a highly professional listing.
Honesty is the Best Policy
Business listings can often contain multiple untruths in an attempt to stand out, but telling lies is more damaging than revealing the truth. Many things can cause a deal to fall apart but the diligence process usually uncovers any salient facts about the company. Above all, business drawbacks that have been concealed by the seller can often transform even minor weaknesses into major obstacles capable of derailing the sale. Therefore, it’s better to tell the truth and use the opportunity to minimize the damage or even find positives. Honest sellers own the drawbacks of their business and use them strategically. When you reveal your business’s threats and weaknesses fairly, you can put them in the proper context.
Price Your Business Competitively
When pricing your business, you’ll need to do some research about the market in your area and your business’s financial performance. Remember that business valuation is both an art and a science, and there are many approaches you can take. Two of the more common methods include for-sale multiples and a discounted cash flow analysis.
- For-sale multiples
For-sale multiples compare asking prices relative to various financial metrics for similar businesses available for sale in your area. Some of the most common multiples used in determining a fair asking price include Price/Sales and Price/Discretionary Earnings. While it varies significantly by industry and financial profile of the business, most small businesses tend to sell for 1-4x discretionary earnings.
- Discounted Cash Flow analysis
A discounted cash flow (DCF) analysis is an intrinsic analysis—meaning instead of comparing a business to other businesses, it evaluates the company based entirely on its own merits. A DCF analysis seeks to value a business based on all future cash flow it will generate, which are then discounted to present day value (the idea here is that a dollar today is worth more than a dollar a year from now).
Each multiple or method has its benefits and drawbacks. When deciding on an asking price for your business listing, consider using multiple methods. Creating a range of values based on different methods can help you zero in on a fair price.
Seller’s should also approach their asking price objectively. Consider what you want versus what you need. Similarly, if you set a price, you should be willing to sell at that price. Keep in mind that buyers will always approach a business with skepticism. If you are seeking a premium price for your business, make sure you can back it up.
Good Business Listings Thrive at Firm Exchange
Creating a good business listing is an important first step in selling a business. At Firm Exchange, we offer the only business-for-sale listing platform that rewards the most transparent and prepared sellers with top placement. Stand out from the crowd and attract serious buyers to your listing. Join today and see how Firm Exchange can help make your deal a success. Get started on your listing for free and only pay when you are ready to publish your listing.
DISCLAIMER: The information contained in this article is for informational and discussion purposes only, and should not be relied upon without seeking your own professional advice. The Firm Exchange, LLC is not a law firm, accounting firm or professional services firm, and accordingly it disclaims any liability for any reliance on the contents of this article. As each situation is unique, you are encouraged to discuss your specific situation with a qualified attorney, accountant and/or other relevant professional services provider.