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?Investors will be interested in the financial return they can expect from your business. Many types of businesses only produce a significant financial return when they are sold, often because the business does not produce excess cash which can be paid out in dividends. It is appropriate for such a business to detail the owner's exit strategy which shows investors of how they will reap the rewards of their stock's appreciation in value. What Makes a Business Sellable? A business has a higher likelihood of being bought if the resulting merged company is more valuable or profitable than the sum of the two companies when they are separate. If the products, services, customers, or operations methods of your business would complement and improve the acquiring company you stand a better chance of being bought. Your company is also more sellable if it has a basic business philosophy and culture which is compatible with the buyer's. Unless the acquiring company would be buying only the intellectual property and other assets of your company, it is important that the human talent of your company can be merged with that of the buyer. Targeting Acquiring Companies Just as you discussed the target customer groups in your customer analysis, your exit strategy would do well to discuss a few potential buyers for the company. The same type of research into these buyers is necessary as the research you did for customers or competitors (in fact, these buyers may be the same as some of your customers or competitors). Look at the means and motive these companies would have to acquire yours. This includes their size and financial means and the reasons they would make such an acquisition. It would be very helpful to look at the history the company has in making acquisitions of other firms, especially if their situation is similar to yours. Eric Powers is associated with Growthink, a business plan consulting firm. Since 1999, Growthink business plan writers have developed more than 2,000 business plans. Call 800-506-5728 today for a free consultation. If you're writing your own business plan, you can access a proven template, here: /products/business-plan-template.
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