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Your Business Prospectus

Originally published: 02.01.14 by Lisë Stewart


Building Value from an Investor’s Perspective

Business owners planning to transition out of their business someday often ask me what I recommend as the first step. Regardless of whether they want to pass the business down to the next generation of family members or sell to an inside or outside buyer, I am likely to recommend the same activity: develop your own company prospectus.

“Why?” you might ask. Don’t business brokers do this when they prepare businesses for sale? Yes, they might — but it can also be an excellent exercise to help you to look at your business with a fresh perspective. Begin by asking yourself: “Why should anyone part with his or her cold, hard cash for this business?” Even if your succession plan does not include a cash transaction, anyone who takes over the business will be taking a financial risk. Is it worth the risk? 

Here are some of the key questions you might try to answer as you prepare your personal business prospectus:

  1. What makes your business special — how are you different from your competitors?
  2. What makes your product special or unique?
  3. What makes your team/employees/managers special? What is it like working with them
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    and how/why are they loyal?
  4. What are the global, national, and regional trends that will keep your business or product viable/desirable?
  5. What is special about your customer or client relationships — what keeps them coming back? How do you nurture those relationships or your reputation? Are these relationships dependent upon you or are they all about your team or your product?
  6. Why should I part with my cash to invest in your business? What kind of return on my investment am I likely to see in three years, five years, or more?
  7. How easy is it to run your business? Are your systems and processes well documented? Do I need you to run it or can someone like me make it hum? 
  8. What is so great about the community where your business is located? Why should I keep it there? What is so great about your building or your street location? 
  9. What about your equipment or proprietary software? Is there something unique, special or interesting about the mechanics of your operation?
  10. What are you most proud of and why do you love your business? And finally, why are you choosing to leave?

Once you step back and answer these questions — or better yet, find that you cannot answer these questions — you’ll have a much better idea of what you need to do to build your business value. After all, would you part with your own, hard-earned cash to buy your business today? If not, figure out why not and get to work changing the answer to that question. 

Lisë Stewart is founder and director of Galliard Group, a training and consulting firm specializing in family-owned and closely-held businesses. She is a nationally recognized author and speaker who draws on her 25+ years of experience to share practical advice for ensuring sustainability of family businesses. Lisë can be reached via email at lstewart@galliardgroup.com.


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