How to Build a Business Buyers Can’t Resist: Growth Tactics That Work

If you have spent years building your business, growth probably means more to you than simply increasing turnover.

You may want to create a stronger, more profitable company, give your team greater opportunities or reduce the amount the business depends on you personally. And, if selling is somewhere on the horizon, there is another important consideration:

Will the growth you are creating actually make the business more attractive to a buyer?

Not all growth is equal.

Buyers will certainly look at revenue and profitability, but they will also want to understand how sustainable that performance is, how easily the business can continue growing and what risks they would inherit after acquisition.

The businesses that tend to attract the strongest interest combine good financial performance with recurring or predictable revenues, capable management, scalable operations and a credible route to further growth.

Here are some of the areas worth focusing on.

1. Build Sustainable Profit, Not Just Turnover

There is an old business saying: turnover is vanity, profit is sanity.

For a potential buyer, sustainable profitability is particularly important. Revenue growth accompanied by falling margins, increasing costs or heavy investment requirements may be considerably less attractive than controlled growth producing consistent profit and cash.

Look closely at:

• Gross and operating margins
• Pricing
• Supplier costs
• Productivity
• Cash conversion
• Recurring and contracted revenues
• One-off or exceptional costs

Good management information matters too. A buyer will want to understand not simply what the business earned last year, but how it makes its money, where margins come from and how repeatable those earnings are.

For more on getting your financial information into good shape, read Financial Areas to Address When Selling a Business.

If you want an initial benchmark for where your business might stand today, the Business Valuation Calculator can also provide an indicative valuation range.

2. Make Your Revenue More Predictable

Growth becomes more valuable when a buyer can see a reasonable degree of certainty behind it.

Depending on the business, this could come from:

• Recurring revenue
• Long-term customer contracts
• Repeat purchasing
• Subscription or service agreements
• Strong customer retention
• A visible order book or pipeline

This does not mean every business needs to become subscription-based.

A manufacturer with strong repeat customers and forward orders, for example, may provide considerable revenue visibility without having traditional recurring contracts.

The important point is being able to demonstrate that future revenues are supported by evidence rather than simply ambitious forecasts.

3. Reduce Customer Concentration

A business can be growing rapidly but still look risky if too much revenue depends on one or two customers.

Put yourself in the buyer’s shoes.

If losing one account immediately removed 30% of turnover, they would need to factor that risk into their assessment of the business.

Building a broader customer base, strengthening retention and developing more than one route to market can make growth more resilient.

Growth through existing customers can be highly efficient too. Cross-selling, upselling and referrals may all contribute to stronger customer lifetime value without the cost associated with continually replacing customers.

The objective is not simply more customers. It is a healthy, sustainable customer portfolio.

4. Build Something That Can Grow Without You

One of the most important questions a buyer may ask is:

What happens when the owner leaves?

If you remain responsible for the key customer relationships, sales, pricing decisions, recruitment, technical expertise and day-to-day problem solving, the buyer may conclude that a significant proportion of the business’s value walks out of the door with you.

Building a capable management team therefore has two benefits.

It gives the business greater capacity to grow today while making it more transferable when you eventually decide to sell.

Give senior people genuine responsibility. Build relationships between your management team and important customers and suppliers. Document critical processes and make sure knowledge exists within the organisation rather than residing solely with you.

If recruiting the right skills is restricting growth, our article The Importance of Recruiting Skills for Growth explores this in more detail.

5. Create a Business That Can Scale

A buyer is not only buying today’s results. They will also be asking what could happen next.

If doubling sales requires doubling headcount, premises and overheads, future growth may be expensive.

A scalable business can increase activity without its cost base rising at exactly the same rate.

That might involve:

• Improving systems and workflows
• Automating appropriate repetitive processes
• Increasing production capacity
• Developing stronger supplier arrangements
• Standardising delivery
• Investing in technology
• Removing operational bottlenecks

AI and automation can increasingly play a part, but technology itself is not the value driver.

What matters is what it enables you to achieve: greater capacity, better margins, faster delivery, improved customer service or stronger management information.

The more clearly you can demonstrate that growth can be accommodated without placing unsustainable pressure on the business, the easier it is for a buyer to see the opportunity.

6. Give Buyers a Reason to Choose Your Business

Ask yourself a difficult question:

Why would someone buy your company rather than another business in your sector?

Your answer cannot simply be that you offer excellent customer service. Most businesses would say the same.

You may have:

• Specialist expertise
• Proprietary technology or processes
• Intellectual property
• A strong brand
• Exclusive contracts
• Difficult-to-replicate accreditations
• An attractive geographic position
• Access to particular markets
• A particularly strong customer base
• Knowledge or capability that would take a competitor years to develop

These points can create strategic value because they give an acquirer something they cannot necessarily reproduce quickly themselves.

Where intellectual property is genuinely important, make sure ownership is clear and appropriate protection is in place.

7. Build a Stronger Management Team and Culture

Growth can expose weaknesses in a business remarkably quickly.

What worked when you employed 20 people may not work when you employ 50.

Clear responsibilities, capable managers and documented processes become increasingly important as the business grows.

The aim is not simply to cross-train everyone to perform several jobs. In fact, that can sometimes create its own dependencies.

Instead, build enough depth that important areas of the business are not reliant on one individual.

A strong organisation should be able to cope with somebody being absent, leaving the company or taking on a different role without the operation grinding to a halt.

For further thoughts on building that capability, read How to Recruit and Retain Top Talent and The Importance of Recruiting Skills for Growth.

8. Protect the Business You Have Built

Growth attracts opportunity, but it can also magnify risk.

Contracts signed when the business was much smaller may no longer be appropriate. Supplier arrangements may be informal. Intellectual property might not have been documented properly. Cybersecurity arrangements may not have kept pace with the size of the organisation.

These issues can remain almost invisible while you own the company.

They become much more visible when a buyer starts due diligence.

Review areas including:

• Customer and supplier contracts
• Employment agreements
• Intellectual property
• Regulatory and industry compliance
• Insurance
• Data protection
• Cybersecurity
• Property and leases

Your agreements should also be reviewed for provisions that could be relevant on a sale, including change-of-control or assignment provisions where applicable.

Read How to Get Your Contracts in Order Before You Sell a Business for further guidance.

Our Due Diligence Checklist can also help you identify some of the areas a buyer is likely to investigate.

9. Measure What Is Driving Growth

A strong growth story needs evidence.

Simply telling a buyer that the market opportunity is enormous will rarely be enough.

Track the indicators that genuinely matter within your business. Depending on the company, these may include:

• Revenue and EBITDA growth
• Gross margin
• Recurring revenue
• Customer retention or churn
• Order book
• Sales pipeline
• Customer acquisition cost
• Revenue per employee
• Capacity utilisation
• Contract renewal rates

The right KPIs differ enormously between sectors.

What matters is being able to explain what drives performance, how those measures have changed over time and what they tell a buyer about the future.

10. Leave Something for the Buyer to Grow

This is an area owners sometimes overlook.

If you are preparing to sell, it can be tempting to pursue every possible growth opportunity yourself.

But buyers need to see something they can do with the business too.

You might be able to demonstrate opportunities to:

• Enter a new geography
• Add complementary products or services
• Sell more to existing customers
• Expand capacity
• Develop a new sales channel
• Acquire smaller competitors
• Apply the buyer’s own capabilities to accelerate growth

The strongest growth plans are credible rather than speculative.

A buyer should be able to see what the opportunity is, why it exists and the evidence supporting it.

Our article Grow Your Business Before Selling – 7 Tips looks in more detail at the practical improvements you can make in the years leading up to a potential exit.

Growth Is Only Valuable If a Buyer Believes It Can Continue

The important distinction is between growth and valuable growth.

A business growing quickly because its owner is working 70 hours a week, one customer has suddenly doubled its orders or margins are being sacrificed to win market share may look very different to a buyer from one producing controlled, profitable and repeatable growth.

Your goal should be to build a company where a buyer can clearly see:

what has driven growth, why it should continue and how they could take it further.

That combination can help increase buyer confidence, strengthen your negotiating position and potentially support a stronger valuation.

If you are thinking about selling within the next few years, our Exit Readiness Assessment can help you understand how prepared both you and the business are for an eventual sale.

You may also want to use our Business Valuation Calculator to establish an initial value benchmark and see how the factors buyers consider can influence valuation.

For a more detailed look at preparing for an exit, download SELL – The 30-Minute Guide to Preparing Your Business for Sale.