Based on the latest worldwide trends tracked from typical users of $1mil – $20mil in revenue businesses of the Sellability Score Tracker, reporting for Q1 2014, the following is highlighted:

The sale of a business demands higher offers when it is under management and of a larger size.
The average multiple for such beasts is 3.61.
To facilitate a premium for your business at sale time, these apply:
  • operating in growth industry i.e. being in the “right place at right time”
  • geographical scalability is an option
  • less ongoing customisation is required i.e. there is a standard formula used for all clients
  • size matters; the larger company the better = past $3mil in revenue gets better multiples
  • under management, not run by owner
  • growing companies i.e. showing a growth rate of 30% or more
  • monopoly control is obvious i.e. what’s the barrier to entry, how is it actually unique
  • score 80 or above

In the time we at Hurst Partners having been running the Sellability Score questionnaire, we are yet to see a score of 80 or above… seems like there’s a lot of work to be done to use your business as a saleable asset.

I’ll go more into detail for each of these over the next posts…

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