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


What planning is required before selling your business?

December 2nd, 2009

You are thinking of selling your business but want to wait until after the holidays in December.  What do you need to do before you list your business for sale?  You need to prepare and get organized.  Here is a list of some of the items which you need to prepare:

 

  • copy three years financial statements
  • three years income tax returns of your business
  • prepare internal financial statements from date of last year end to the most recent month
  • prepare a list obligations including rent, lease obligations etc
  • list of fixed assets included in the business
  • prepare a 2 page summary of the business
  • include ideas of how to expand the business to entice someone who wants to take the business to the next level
  • determine normalized earnings
  • estimate the asking price of the business determine if you want to use a broker or sell the business yourself
  • find a business broker who you are comfortable with to represent you
  • ask the business broker for assistance in preparing the executive summary
  • ask the business broker for assistance in determining the asking price of the business
  • clean up the business premise and make it neat and orderly
  • organize the warehouse, make sure there is adequate lighting to see the inventory
  • through out old boxes and items which should have been destroyed years ago
  • organize what is left

 

The more prepared you are the easier it is for the business broker to represent you.  If the broker and the investors understand your business, then they may be willing to pay more for something they understand rather than seeing an assking price which does not correlate to the profits of the business.  In that case, the potential owners will not ask any details of your business.


Filed under: Selling a business — Gary Landa @ 10:46 am


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