Business Demand

Criteria 1.  
Business Demand And Liquidity

By Josh Foo,

The buyer demand for your type of business and/or similar businesses is extremely important.

In share-trading, traders are taught that market liquidity is important because a trader can enter and exit a market quickly if shares being traded has high average daily trading volume.  This mean there is liquidity in the market - or many sellers and buyers.  

Selling a business is no different.

Supply and Demand of BusinessesThe business for sale market is irrefutably determined Supply & Demand. Photo: Pixabay

Overlooking all the extraneous noise on exit strategy, the market is irrefutably determined by one factor - supply and demand.  The supply of businesses for sale on the market and the number of buyers (demand).  

The supply and demand of businesses in the market underpins how long your business needs to be on the market before it is sold.  To sell quickly, you need substantial business demand from buyers - this is arguably more important than supply. 

Unlike shares or houses that are seen as relatively homogenous, businesses are far more unique.   Every business is different in some ways, which means that the competition to attract buyers is not as scary if your business is obviously more enticing to the buyer. 

However, if there is weak demand from buyers for your type of business, then rising above the competition isn't going to help too much.     

Succinctly, you can change, transform and add value to your business that you can't do with shares to attract existing buyer demand.  But the business demand for your category of business needs to be there in the first place.*

Read Next ->    Criteria 2 To Fast Exit: Type of business 

Last updated June 19, 2018

› Criteria 1. Business Demand & Liquidity