This article are provided for information purposes only, and are not intended as legal advice.

What do you need to do when you want to sell your business?

October 21st, 2008

When you see your home, many people will hire a house stager to make your house more appealing for a potential buyers. This can be done for a business as well but the term stager is not used for preparing a business. If the business is not presented people, potential buyers may not look at your business for sale.

Things that you need to do prior to selling the business
Make sure that you want to sell your business. If you have built up your business over the years, many owners become emotionally attached to the business. They may put the business up for sale to see what they are worth and have no intention of selling the business. Use a business valuator if you want to determine the value of your business. If you test the market without wanting to really sell, the next time that you put the company on the market, no one may look at it however you may really want to sell it but will not be taken seriously by potential buyers of businesses.

Assemble a team around you prior to putting up the business for sale. This can include an accountant, tax advisor, lawyer, business broker, financial planner. The specialists that you use do not necessarily have to be your own accountant or lawyer. If your accountant has never been involved in the sale of a business, do you want him/her to learn by selling yours or do you want an experienced person who can help you determine the strategy, selling price, and advise you on the tax implications of the selling of the business. This can include selling assets or shares.

Once you have the team assembled, declutter your business. If you have 30 years of old documents, clean house, shred the old documents and keep what you are legally required to keep. Organize the warehouse, dust if that has not been done for years, make the aisles neater, make there there is adequate lighting in the warehouse so that you can see the inventory. Segregate old inventory and slow moving inventory from the regular inventory. Label the shelves, organize the warehouse in a logical order.

In the office, make sure that files are stores in boxes or filing cabinets, declutter the office. If you have 10 year old computers which are not being used, dispose of them so there is less clutter in the office.

Determine the tax implications of the sale of the business. Come up with a strategy. Plan how long you will train the new owner to run the business. Start assembling information that may be requested by a potential buyer. If you look organized and can provide the seller with information, that speeds the process up considerably.

Financial planning. If you are a small business, chances are most of your net worth is tied up in the business. What are you going to do with the money? Plan in advance so that you are not scrambling at the end. Many financial planners will invest your money. If you get a planner who can help you prior to selling your business, you may be better off because you will have a plan for retirement.

Do you have any hobbies. One of my clients told me years ago, he got married for better or worse but never to have lunch with his wife. After he retired at age 65, he started a second career until he was 80! They were married for 50 years before his wife passed away but he acknowledged that if he would have stayed home after he retired, they may not have been married for 50 years.

Now that you have prepared the business, you will need an executive summary and a detailed package to sell your business. You can have this completed by a business broker or consultant but you will still need to assist in the preparation of this information.

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Filed under: Sell a business — Gary Landa @ 9:25 am

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