What do you need to think about before listings your business for sale?

If you are thinking about selling your business, you need to get things prepared in advance.  What should you do to prepare?  When you are selling your house, many people are staging their house to make it look good and for potential buyers to see the house without being distracted by items which are personal in nature and are not going to continue on with the new owner.  Selling a business is exactly the same concept.

Here are a few things which you need to do:

  • tidy up the business, declutter it, put proper lighting in the warehouse so that people can see the inventory rather than selling a warehouse which is dark and dingy.  Investors see if the property looks neat and tidy and they may assume that you run and operate the business the same way, if the warehouse is neat and organized, they may believe that the business is neat and well run.
  • organize the materials needed for the sale including
  • copies of the last three year financial statements
  • internal financial statements up the the most recent month available
  • copies of all leases and obligations
  • summary of the business – providing information about who is the customer base, what makes you unique, why do people use your firm
  • provide summary but no names of top ten customers and suppliers by percentage in order to show the economic dependency on certain customers and suppliers
  • determine normalized earnings of the business
  • determine when do you want to sell
  • summary of type of staff, by position, not by name and years of employment with firm
  • brief description of the opportunities that a new owner may create
  • if you are going to sell your business by yourself and post the business on www.thebusinessplace.com
  • if you need assistance, finding a broker and interviewing them to find the broker that you will select to help you sell the business
  • select a financial adviser to help you determine the tax and accounting issues with the sale of your business
  • select a lawyer who can help you with the purchase and sale agreement and look after your best interests

This is a sample list but not all inclusive of items which you should consider before selling the business