How & What To Prepare To Sell Your Business
Helpful Steps That Promote Higher Value
In preparing your business for sale it is wise to look at your business through the eyes of potential buyers. Your goal should be to achieve a high first impression of perceived value in the minds buyers as possible. The better you present the financial picture of your business the more confidence buyers will have in the business. Attractive first impressions can create a buying frenzy for your business and drive the highest possible selling price.
Preparing the Financials
Documents to gather for initial consultation with your Biz-Sell Adviser:
- 12 month Profit and Loss Statement(s) – up to 3 years when possible
- 12 Month Sales Statements (from POS system if applicable) – up to 3 years when possible
- List and amounts of perks paid to owner (medical benefits, auto allowances, entertainment, etc.)
- Names of all owners/investors and salaried family members involved in the business
- Copy of building lease
- Copy of franchise agreement
- List and amounts of any debt obligations transferring to new owner (i.e. equipment leases)
- Menus or Marketing materials
This list of action items below is intended to encompass all types of businesses and consequently some items may not be relevant to your business. Likewise, our approach here is to try to “think of everything” but by no means should you try to complete every task or gather every document on this list. Your Biz-Sell Adviser will help to narrow down the action items necessary for you and your specific business sale needs.
Preparing the Business
- Sell any obsolete or slow moving inventory that may give a perception of weighting down inventory
- Document Policies & Procedures – especially any unwritten processes used in daily operations.
- Clear up staffing issues – buyers do not want to inherit bad employee problems and could be turned off if they catch wind of any issues
- Make yourself redundant – Buyers like to see that it is easy for them to step right in as new owner.
- Remove (or sell) any furniture, fixtures, or equipment not necessary to run the business and that you do not want include in the sale of business
- Clean and clear the entire premises – give it great curb appeal just as if you were selling your home
- Correct any parking problems – if parking issues impede the sales in any way do your best to rectify
- Have Landlord clean the premises – paint or pressure wash the exterior if necessary
- Landscaping – cutback trees or trim hedges where necessary, especially in front of signage
- Replace cracked windows and thoroughly clean all inside and out
- Repair roof or HVAC units if necessary
- List of all furniture, fixtures, and equipment necessary to operate the business included in the sale
- Make confirmation that all leases (building & equipment) transferring with the business
- Put some thought into non-compete agreement distance and time-frame
- Prepare to articulate your “reason for selling the business” – keep in mind, buyers are looking for hidden factors that may adversely impact future of the business
- Collect overdue accounts receivables
- Make certain you are up to date accounts payables
- Strengthen key business relationships – verbal to written agreements, supplier agreements not cancelling
- Gather 3 great customer testimonial statements
- Gather 3 great vendor/supplier testimonial statements
- Use this list of what buyer’s will be asking for during due diligence to
Start preparing items on this list that the buyer may ask for during the due diligence phase of the sales process.
Many buyers considering purchasing a business are first-time buyers and skittish while going through the business sale. Any surprises along the way can be the kiss of death to closing a deal. Your Biz-Sell Adviser can help you prepare for the sale and uncover any potential obstacles that may slow down the sale of your business.
Call us for a free, no obligation, confidential consultation.