How to Spot a “Good” Business

Tips for Choosing a Business Broker

For the buyers out there looking at business listings, here are a few items I’d recommend checking off:

  1. Solid Financials: Steady revenue growth, positive cash flow, and manageable debt are strong indicators of a healthy business.

  2. Recurring Revenue: Subscription models or repeat customers provide stability and predictability.

  3. Market Demand: Is there a clear need for the product/service? Is the market growing or saturated?

  4. Competitive Advantage: What sets this business apart? Strong brand, unique offerings, or loyal customer base are key.

  5. Operational Efficiency: Streamlined processes, minimal waste, and a skilled team.

  6. Growth Potential: Can the business easily scale or expand into new markets?

I’ll add that while 1-6 are important, a good business isn’t just about numbers. Look for a business you’re passionate about, with a strong team and a clear vision for the future.