There are many subjects to tackle in M&A, but this week, I want to start from the beginning.
What makes a business “sellable”
Now, the word “sellable” can mean many different things. But for the purpose of the newsletter we will focus on the specific factors that make your business more desirable in the eyes of a buyer.
The goal is to help you spot gaps before going to market, and put you in the best position to sell on your terms.
We’ll cover:
- 3 insights into factors that make or break sellability
- 2 frameworks to help you evaluate readiness
- 1 action step you can take this week
3 Insider Insights About Sellability
1. Profitability doesn’t always equal sellability.
You might assume a profitable business will naturally attract buyers. This is true in some cases, but don’t assume that profitability is enough to guarantee a smooth exit.
A business can be profitable but still unsellable. This often happens if it is highly dependent on the owner (or a key stakeholder), there isn’t a clear sales pipeline, or the revenue is tied up in one or two customers.
Remember, buyers value future potential over past performance. A “sellable” business is one that has the infrastructure and processes in place to thrive under new ownership.
2. Timing matters — but the timing will never be “perfect”
Market conditions and industry cycles play a role in how sellable your business is. Strong markets can drive competitive offers, and downturns can tighten deal activity.
While this may be true, there will never be a “perfect time” to sell your business. If you hold off indefinitely or search for “just the right moment”, you risk losing momentum.
The best approach is to prepare early, so you’re exit-ready when opportunity arises.
3. Perception & preparation matter for sellability
Two businesses with similar financials can be valued very differently depending on how they’re presented to buyers.
If your books are clean and your systems documented, buyers perceive lower risk. That perception alone can increase competitive tension.
On the other hand, disorganized records or unclear processes make even a profitable business look fragile.
2 Frameworks to Evaluate Sellability
Most buyers look for four things when deciding whether a business is worth pursuing:
- Financial Clarity: Clean, reconciled, and transparent books.
- Transferable Operations: Systems and processes that work without the owner.
- Diversified Revenue: Customers and suppliers spread across a broad base.
- Growth Story: A credible path to future expansion.
If one of these pillars is missing, sellability drops. A strong foundation across all four dramatically improves buyer interest.
The Value vs. Risk Equation
At its core, sellability can be broken down to this equation: Sellability rises as perceived risk falls.
If buyers believe revenue is transferable and growth is achievable, they’ll stretch further to win the deal. Understanding how buyers view this balance helps owners see their business through the right lens.
List Of Our Completed Transactions
1 Action Item This Week
Conduct a sellability audit.
Take an honest look at finances, customers, operations, and people.
Where are the gaps? The sooner you identify them, the sooner you can close them.