John ran a very successful cable and wiring business, specialising in the installation of security systems and surveillance equipment. John had run the business for 30+ years and decided it was time to retire and sell the business.
A buyer is normally looking for a business which they can buy, walk into, and keep it trading to return a profit (which they have essentially paid for).
John’s business had no real structure to it. John essentially ran the show – coordinating the jobs, being the lead electrician on the jobs, and issuing instructions to his staff member. The operational processes were in John’s mind and not documented.
Typically, buyers prefer a steady stream of leads coming into the business from well-established and effective marketing programs which they can continue. John’s leads came to him via word-of-mouth, personal referral, and a measured amount of “intuition” on John’s part.
John had a profitable business. But, in every respect, he was the business. With John out of the business (as would be the case in a sale situation), we would have no real advertising function and would lose the person who does the bulk of the work. Added to this, there were no documented processes for the business, and the sole employee was expected to leave.