Let’s get this out of the way: Yes, profitability matters.
But in the world of SME acquisitions, being profitable isn’t enough to guarantee buyer interest — especially in the $1M–$10M revenue range, where most local businesses sit.
In the last few years, we’ve spoken with dozens of acquirers (private equity, local entrepreneurs, family offices, trade buyers), and here’s what they’re actually prioritising — especially when looking at deals across Singapore and Southeast Asia.
1. Owner Independence
If your business can’t run without you, buyers see risk.
They’ll ask:
- “Who’s running things if the owner leaves?”
- “Is there a 2IC (second-in-command) or key manager in place?”
Buyers don’t want to buy a job — they want to buy a machine that runs with or without the owner.
Tip: Buyers in this region often prefer stable handovers and transitional support. A trained operations manager or general manager already in place is a huge plus.
2. Clean, Understandable Financials
Forget perfectly audited accounts — most buyers just want clarity and transparency.
Checklist:
- 3 years of clear P&L and balance sheets
- Separation of business and personal expenses
- Consistent bookkeeping (cloud-based tools help!)
3. Recurring or Predictable Revenue
One-off projects or seasonal spikes make buyers nervous.
They want to see:
- Retainer clients
- Long-term contracts or contracts with repeat orders
- Subscriptions (even informal ones)
This indicates sustainability and gives buyers the confidence that revenue won’t disappear after you leave.
4. Simple, Transferable Operations
If your business relies on 20 WhatsApp groups and handwritten inventory logs, it’s going to be a tough sell.
Buyers like businesses with:
- SOPs (standard operating procedures)
- Basic systems (HR, payroll, CRM)
- Processes that don’t rely on one person’s memory
This is often more valuable than you think — and makes integration easier too.
5. Scalability or “Upward Leverage”
Even if you’re running a small shop, buyers are asking: “What could this look like 2 years from now with a little capital and tech?”
Can your model be:
- Replicated in other cities?
- Digitalised or franchised?
- Grown with bolt-on services?
Especially in Southeast Asia, regional growth potential is a big draw — even for trade buyers.
6. Unique Selling Point(s)
What sets you apart from your competitors?
Do you have:
- An innovative product that no one else is offering?
- A niche focus?
- A defensive moat?
Having a unique selling point or two that sets you apart from your competitors gives you leverage over others in the same industry and makes your business more desirable.
Final Thoughts
So yes, profits matter — but they’re just the starting point, one part of the whole picture. Buyers are on the lookout for other key factors such as sustainability and scalability as well.
If you’re thinking of selling in the next 1–2 years, it’s worth spending a few months strengthening the real drivers of value. Most of these don’t require a complete overhaul — just focused, practical improvements.
Want help assessing what buyers would see in your business?
Reach out for a quick, no-obligation conversation.
