24 Aug Essential Elements for Your Main Street Comprehensive Business Reviews
A comprehensive business review stands as one of your single greatest tools for properly presenting a business and getting prospective buyers excited. BBP panelist Jim Parker believes that business brokers absolutely must invest the time necessary to create a strong CBR for every business they sell. Parker outlined what key elements should be in a main street focused CBR. He points out that a CBR can be a dynamic and fluid document, and you should feel free to move things from category to category when needed.
Every CBR should have a concise and well thought out cover page that listed basic information. Other key information should include the purpose of the CBR as well as a confidentiality statement. The executive summary should utilize a bullet point presentation and be easy to read.
Once the entire CBR is finished, you will also want to create a business overview that will act as a sort of summary of the business.
The Seller Interview
A key part of the process of creating the CBR should be the seller interview. The seller interview should take between one to three hours. During this time, business brokers should ask lots of questions and develop a real understanding of the business.
Engaging in a comprehensive interview will save everyone involved a good deal of time. After this detailed interview, you will not have to continually go back to the seller with questions. It is key that you emphasize to sellers that the interview will take some time, but will save you time and effort in the long run.
Charts, Graphs and Pictures
It is critically important that a CBR is easy to pick up and read. The buyer should be able to quickly digest key information. As a result, he feels that CBRs should use bullet points, graphs and pictures. Never lose sight of the fact that you are selling not just a business but a dream as well. The psychology of the buyer must always be kept in mind.
Ultimately, the creation of a winning CBR means investing the time to assemble key information. Then use that information to craft a document that maximizes all a given business has to offer. An essential part of that process is information gleaned from the owner.
Another area of information that should be included is a client breakdown. In short, the CBR should look at the single largest clients so that prospective buyers can see that no one client is making up the bulk of business.
An organizational chart that outlines who the key employees are, their salaries and benefits and how long they’ve been with the company should also be included. In the process of covering this information, it is essential to not reveal names or give away any trade secrets.
Other key information, such as the location of the business, Google map information regarding the business, cost of rent, square foot of the business, type of building occupied, the location of major roads and intersections and other vital information, such as the business broker’s contact information, should be included.
Cite Your Sources
Any sources used in the CBR should be cited so that buyers can look up the information on their own. Providing such information helps build a level of trust and denotes a level of professionalism.
Paint a Clear Picture
A good CBR should specialize in painting a picture of the business and the seller. It should clearly outline what makes the business desirable. It should tell a story, answer questions and highlight opportunities contained.
It should also answer these questions:
- What separates this business from its competitors?
- What makes the business different?
- Why does this business have a future?
- Where are the areas to grow the business?
- How can the business be improved?
- Why would I want to buy this business from the owner?
A savvy business broker will make sure that his or her CBR is far better than the competition. Or, as Parker noted, “Every little thing that we do, if we’re doing it just a little bit better than our competition, yields a superior outcome.”
Never lose sight of the fact that you are selling not just a business but a dream as well. The psychology of the buyer must always be kept in mind. Investing the time to create a well-thought out CBR can dramatically improve the chances of a business selling.