Every business owner needs to truly understand: "Who his or her most important customer is"...and Why that is the case! This realization will guide the critical actions required to maximize business value.

This knowledge will help facilitate a timely business sale on optimal terms. (You may want to review the of "types of business buyers" article on this site...to begin thinking about the future marketing process for your business.)

The most important customer for any business owner is the

person, persons, or entitythat will eventually buy the business.

Understanding the universe of buyers and

what the most probably and best buyer will be seeking

is fundamental to effecting an ownership transition!

Let's explore were the assets you will need for retirement will come from! Annual earnings in most businesses are applied as follows: increase in working capital to support operational growth; increase in capital investment to expand capacity or change operating characteristics; salary and benefits for the owner. In most cases, the latter of the three uses of funds is normally sufficient for personal and family needs, but it does not result in a large build-up of investment funds. Consequently, the biggest financial gain for the business owner will be from the change of ownership of his or her business. (Most business owners have over 80% of their net worth in their business!)

The majority of the financial benefit from years of hard work and business ownership will be accrued when the business is sold.

Once this is understood, there are three key steps that should be taken.

First, determine who the most probably and the best type of buyer for your business will be.

Second, identify exactly what business characteristics this small group of target buyers will be sensitive to in making the purchase decision. (i.e. find out precisely what the buyer will want.)

Third, figure out how to give the buyer what they want...what sales and profit performance are required to attract interest...what systems will be presumed to be in place...what level of professional management experience is most desirable ...what type of development for new or key products will improve the discussion, etc.

Once these three things are known and fully understood...it is the business owner's job to enhance the value of the business in the eyes of the most important future customer.