Sellability Advisor Tool



The Sellability Advisor™ tool lets you assess your company's 'sellability' and provides improvement tips. You can rate up to 7 key aspects of your business such as its current financial status and growth potential. After you’ve submitted these ratings, the tool will return you a Sellability Score, as well as suggestions on which key aspects of your business need to be improved and how.

Answer the questions below:


1. Financial Strength

How profitable is your business right now? You need to figure out how financially strong your business currently is and then give it a score between 1 and 10. more.. If you give its financial strength a score of 1, then it means you don’t know how financially stable your business will be in the future. In other words, it has little to no chance of being profitable. This should indicate to potential buyers that they’ll need to use additional funds just to keep the business running after they purchase it.

On the other hand, if you give your business’s financial strength a 10, then it means it will likely be very stable and profitable in the future. This estimate is based on past financial reports which show an excellent track record of good profitability and low debt-to-equity ratio.


9

2. Growth Potential

How much potential does your business have to grow and be more profitable? If you give this a score of 1, then it means your business has no chance to grow. more.. It means that its products or services will not enter into any new marketplaces nor will there be any growing consumer interest in them.

If you give the growth potential of your business a score of 10, then it means your business is healthy and continuing to grow fast. Your business should have a track record of growth with a trend that shows it will continue to expand in the future. A growing demand for the products or services is expected.


5

3. Customer Portfolio

Evaluate the customer portfolio. more.. Do you have a lot of clients? The more profitable customer accounts you have, the more valuable your business is. Therefore, if you give your customer portfolio a score of 1, then it means your business depends on only a few repeat customers to survive. This spells trouble because if these few clients ever go away, then your company loses all its revenue.

If you give your customer portfolio a score of 10, then you have a lot of valuable and diverse customers. Rather than depending on just a few key accounts, you have hundreds of buyers giving you repeat business. This means that if a few of these customers go away, profitability will scarcely be impacted.


7

4. Recurring Revenues

Try to evaluate the revenue streams of your business in terms of their longevity, stability, and predictability. more.. If you give your recurring revenues a score of 1, then it means your business has no long-term contracts established and no long-term repeat customers. Instead, your business just survives on random sales and new customers. If you score your recurring revenue a 10, then your business has plenty of long-term contracts where customers have consistently been paying on them for a long period of time.


8

5. Value Proposition

How much value do your products or services provide? When you are evaluating value proposition, the score should be based on the uniqueness, profitability, and competitive advantages of your product offerings. more.. If your business does not have any unique products or services, then it is likely not making much of a profit. Therefore, you would give its value proposition a low score in this case. On the other hand, if your business does have unique products or services that are in high demand and are making good profit with very little competition, then you would give the value proposition a high score.


9

6. Customers Satisfaction

The key to any successful business sale is customer satisfaction. more.. For this reason, businesses often struggle when they’re receiving customer complaints, product returns, and negative feedback. If this is the case with your company, then you need to give its customer satisfaction a score of 1. However, if customers enjoy doing business with your company and they’re consistently leaving it positive feedback, then you should give its customer satisfaction a score of 10.

NB! Be sure to have the proper documentation to back up this claim. A potential buyer may want to see this documentation as proof that there is a high level of customer satisfaction.


9

7. Independence from the Owner

Owner independency signifies how much you, as the owner, are independent of your business. more.. For example, if most of your business operations depend on you to run them, then you are not independent of your business. This means you would give your owner independency rating a score of 1. Now, if your business contains many employees and/or contract workers which whom you delegate most of your company’s responsibilities too, then this makes you near 100% independent from your business. In this case, you would give your company’s owner independency rating a score of 10.


6


Evaluate

How Does it Work

The Sellability Advisor tool calculates the scores you gave to the seven key aspects of your business and then supplies you with a weighted average. Each score ranges from 1 to 10. The weights of the aspects (criteria) are as follows:

  1. Financial Strength = 8
  2. Growth Potential = 7
  3. Customer Portfolio = 4
  4. Recurring Revenues = 4
  5. Value Proposition = 5
  6. Customer Satisfaction = 4
  7. Owner Independency = 5

The Sellability Advisor tool gives you one final score, ranging from 1 to 10. It will factor in all the criteria and average weighted scores together for this summary score. The result will be a reflection of how sellable your business truly is.

Sellability will mostly be about time and pricing. Will you be able to sell your business quickly? Will you need to drop your asking price? If you can answer yes to the first question and no to the second question, then you are in good shape.

Along with the Sellability Score, the tool will automatically give you suggestions on all the key aspects which were rated with a score of less than 6.


Related: Assessing the Need for Short-term Changes to the Business