Selling a business in places like the UAE isn’t just about finding buyers. Owners need to know how buyers judge the value of their business. You might understand the blood, sweat, and money you’ve poured into growing your company. But does it tick the right boxes for a potential buyer?
This post will explain how valuations work, what makes a company appealing to buyers, and ways to find out if you’re ready to enter the market.
What Do Buyers Want to See in a Business?
Most people buying a business care about more than just how it’s doing right now. They care about its future possibilities, the systems in place, and how they can step in and run things.
Things Buyers Pay Attention To:
- Profit and cash flow – Does the business generate income?
- Clear financials – Are the records organized, current, and ready for an audit?
- Loyal customers – Do people keep coming back to buy?
- Growth potential – Can the new owner grow the business or open new locations ?
- Employees and systems – Is the staff skilled, and is everything documented?
If your business excels in these points, selling it becomes easier, and you can ask for a better price.
How Do Buyers Determine Your Business’s Worth?
Let’s break down how buyers think about your business’s value in practical ways. Business valuations fall into one of three categories:
1. Valuing Based on Earnings
This approach is the most common. Buyers look at net profits or EBITDA (earnings before interest, taxes, depreciation, and amortization) and then use a multiple ranging from 1.5× to 4×, depending on your type of business.
Example: If your EBITDA is $100,000 and your industry has a 3× multiple, your business could be valued at $300,000.
2. Valuation Using Assets
This method works well when businesses own many physical things like buildings, machines, or cars. The buyer checks what the business owns after subtracting debts and then decides a price based on those things.
3. Market-Based Valuation
This way of valuing a business compares it to others like it that were sold nearby or in the same type of work. People use this approach in industries like retail online selling, or food where plenty of similar examples can be found.
Why Some Businesses Don’t Sell
Not every business finds a buyer even if it earns money. Here’s why that happens:
- The business relies too much on the owner.
- Financial records and tax filings aren’t in order.
- The lease is about to expire or can’t be extended.
- Legal problems or unresolved debts exist.
- Limited opportunities to expand or improve.
Most buyers want to walk into a business that works right away—not one that needs fixing .
Steps to Make Your Business Ready to Sell
Now that you understand how buyers assess a business, the next step is to focus on making it ready to sell.
Follow these steps to get started:
- Hire a CPA to audit or review your financial records.
- Write down clear SOPs (standard operating procedures) to make handing off operations smoother.
- Update your trade license, permits, and contracts.
- Focus on building your digital presence and getting customer reviews in industries like beauty, food and beverage, or retail.
- Pay down any debts that you can.
A prepared business inspires confidence in buyers, which helps close deals faster and often at a better price.
Final Thoughts: Is Your Business Ready to Sell?
To understand what makes a business attractive to buyers is essential. The next step is making it ready to sell.
At SellAnyBiz, we assist business owners in the UAE to evaluate, prepare, and sell their businesses . Whether you are selling for the first time or overseeing a group of businesses, our skilled team helps you review your business, showcase its advantages, and link with serious buyers.
🔍 Interested in knowing how much your business is worth?
Reach out to us today at www.sellanybiz.com or call +971 586 911 369 to schedule a free valuation consultation.
