Mirror, Mirror, on the Wall: Is My Business Worth Sod All?

Discover the 10 Critical Factors That Will Make or Break Your Business Sale

So, you’ve poured your life and soul into building your business for a decade or more and now, you’re eyeing the exit and dreaming of a big payday. But here’s the brutal truth: most founders wildly overestimate what their business is worth. Buyers aren’t sentimental; they’re calculating—and they might just decide your business isn’t worth buying at all. If you don’t want to end up shutting up shop when you retire, it’s time to get real about what actually drives value. Let’s dive into the 10 things buyers care about most.

1. Recurring Revenue: The Golden Goose

Your customers should pay you like clockwork—even when you’re on a beach.

Buyers love a steady cash flow, and nothing says “safe bet” like recurring revenue. This is the holy grail of business value. Long-term contracts, subscription models, anything that guarantees income without having to constantly chase new sales - these are what make buyers sit up and take notice.

Example: My client Sarah owned a marketing agency with a few large clients on retainer. She planned to sell the business and retire, but when a potential buyer saw that 80% of her revenue came from just two clients, they walked away. With that kind of dependency, a buyer sees risk, not value.  Over the next 12 months we worked together to diversify her client base and develop consistent lead-flow to acquire new and better customers on demand.

2. Dependence on You: The Owner Trap

If your business can’t run without you, it’s not a business - it’s a job.

Buyers are looking for a turnkey operation, not one where they need to step into your shoes to keep the lights on. If you’re the rainmaker, the face of the business, and the one everyone turns to when there’s a problem, that’s a big red flag.

Example: When I first started working with Dave, he was the proud owner of a consultancy where every major client called him directly for advice. For a couple of years, he’d thought about selling his business and finally taking that world cruise with his long-suffering wife. But every buyer he’d talked to over the past 24 months backed out, worried that when Dave left, his clients would follow him out the door.  Over the next 12 months we worked together to build the systems and team capabilities his business needed to work without him and significantly increased his business valuation.  Because of the changes we made together, he’s managed to take the cruise without selling his business and is more confident of finding a buyer in future.

3. Customer Base: Spread the Love

If losing one client would cripple your business, you’re in trouble.

A buyer’s worst nightmare? A business that crumbles if one or two customers walk away. High customer concentration is a big risk. The more diverse your customer base, the better your chances of selling.

Example: My client Mike ran a software company where 70% of his revenue came from one massive corporate client. When Mike had tried to sell, no one was interested. Buyers were too scared that if that one client left, there wouldn’t be much of a business left to buy.  Like many small businesses, his revenues were lumpy and dependent on a few clients – often personal connections – without whom, the business would quickly fail.  One of the first things we did together was clarify his ideal customer profile based on past success.  We were then able to put together an effective marketing and sales plan and processes to drive new customer acquisition.

4. Financial Performance: Show Me the Money

Buyers aren’t just looking at what you made last year - they’re looking at the trend.

Consistent profitability and healthy cash flow are the bread and butter of business valuation. Buyers will dissect your financials, looking for signs of strength and sustainability. But if you’ve been coasting on past successes, don’t be surprised if buyers aren’t impressed.

Example: Linda was the owner of a retail store that had a steady, but flat, profit margin. She told me she wanted to sell and retire in a couple of years. But when potential buyers saw her financials, they only offered a fraction of what she had hoped for. Why? Because her business hadn’t grown in years and didn’t look like it was going to start anytime soon.  Working together over the next 18 months, Linda and I developed and implemented a growth strategy that increased her revenues by 57% and her profits by 23%.  Her business is now worth a great deal more and buyers are far more likely to acquire it now that it has been rejuvenated.

5. Market Position: The King of the Hill

In business, being the king of the hill counts - and buyers know it.

Do you have a strong brand, loyal customers, and a moat around your business that keeps competitors at bay? Buyers love that. It means they won’t have to worry about someone swooping in and stealing your customers the day after they buy the business.

Example: My client Martin ran a niche manufacturing business with a patented product and a solid brand presence. He wasn’t ready to sell, but an offer came in anyway because his market position was so strong. Buyers knew his business was a fortress - and they were willing to pay top dollar for it.

6. Barriers to Entry: Keep the Competition Out

The harder it is for others to compete with you, the more your business is worth.

Buyers don’t just look at how well you’re doing - they look at how hard it would be for someone else to do the same. Proprietary technology, exclusive contracts, regulatory approvals - anything that makes it tough for new players to enter the market is pure gold.

Example: When Emma started one-to-one coaching with me, she had owned her health tech company for 22 years and had developed a patented process as well as exclusive supplier contracts. When she decided to sell, buyers lined up to make offers because they knew it would be nearly impossible for a competitor to replicate her success.

7. Marketing Machine: Buy Customers on Demand

Can your business predictably and consistently generate new leads?

The ability to buy customers on demand is one of the most valuable aspects of any business. A documented, proven marketing system that reliably attracts qualified leads is a massive asset. And if you’ve also got a killer USP (Unique Selling Proposition) that your competitors can’t copy, you’ve hit the jackpot.

Example: One of my small group coaching clients, Lisa, owned an e-commerce business with a strong social media presence and a killer sales funnel. She knew exactly how much she needed to spend on ads to generate a certain number of sales. When she put the business up for sale, the offers exceeded her expectations because buyers saw a predictable revenue stream they could scale.

8. Sales Process: Closing Deals Like Clockwork

How easy is it to convert leads into paying customers?

A written, measured, and continuously optimized sales process is critical. If your sales team (or you) is winging it every day, it’s time to get serious. Buyers want to know that new leads will turn into customers, and customers into cash, with minimal friction.

Example: Duncan was an early executive coaching client of mine who owned a B2B services firm. His sales process was in his head, and it relied heavily on personal relationships he’d built over the years. When Duncan tried to sell the business due to health issues, he couldn’t find a buyer. The lack of a documented, replicable sales process made his business too risky to buy.  Once achieving a sale became a priority for him, we switched from Executive Coaching to Business Coaching and developed a plan to help him exit in 18 months.

9. People: The Right Team in the Right Place

Great businesses are built on great people - and buyers want to keep them.

Key person dependencies aren’t limited to the owner. If your business relies on a few crucial employees, and you’ve got no plan for replacing them, buyers will worry. Add in the challenge of recruiting and retaining talent, especially in remote or underserved locations, and you’ve got a potential deal-breaker.

Example: My client Barbara ran a small engineering firm with a few loyal, long-serving employees. When she wanted to hand over the reins to her kids and retire, the business began to fall apart as key staff retired too. Her kids couldn’t manage the business without those key employees, and when they retired, operational delivery and sales both cratered. Few buyers will want to touch your company if it is similarly dependent on long-serving “expert” staff.

10. Systems and Processes: Plug and Play

Buyers want a business that runs like a well-oiled machine - not one that falls apart when they take over.

Documented systems and processes are what turn a chaotic operation into a valuable asset. Buyers want to know that the business will keep running smoothly without needing to reinvent the wheel every day. This isn’t just about efficiency - it’s about scalability and risk reduction.

Example: John was a coaching client who owned a chain of coffee shops.  Over a couple of years working together we developed a well-documented process for everything - from sourcing beans to training baristas. When he decided to sell due to an unfortunate cycling accident, buyers were impressed by how easily the business could be run by someone else. His detailed processes made the transition smooth, and he got a great price.

So, what’s the takeaway? If you’re serious about selling your business and retiring comfortably, you need to start planning now. It’s not enough to decide you want to sell - you need to make your business a valuable asset that’s worth buying. The difference between a well-prepared exit and a last-minute scramble could mean hundreds of thousands, if not millions, in your pocket.

Get in touch, and let’s chat about your exit strategy. It might take a few years to get everything in order, but the payoff will be more than worth it. Wouldn’t you rather sell a thriving business and leave a legacy or simply shut up shop and pay off your loyal staff? Let’s make sure your mirror tells you the right story when it’s time for you to cash out.

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