In order
to sell your business for the best possible price you will
need to do some thorough preparation.
In this
section we will cover the more important items you should
prepare before meeting your first buyer.
While
some preparation is always necessary, you want to avoid
the trap of waiting until everything is perfect before
putting your business on the market. Things will never
be perfect. But the items discussed here are necessary
for you to have ready ahead of time.
Financial
Statements: Possibly, the most important thing to prepare
when selling your business are your Financial Statements .
There is no more important item when it comes to building
trust with the buyer (and motivating them to pay top dollar)
then a complete set of accurate financial statements. It is
assumed that your accountant will be the one actually put
your statements together. So, our discussion will focus on
what the buyer will look for and what you can do if your company's
financial performance has been sub par recently. Financial
Statements
Recast
Financial Statements: Since most small business are managed
with an eye towards lowering taxes, financial statements alone
don't give a true picture of a company's performance. Even
an honest and accurate set of statements won't show the total
value your business creates. Recasting your financial
statements is a way to add your salary, perks and benefits
back onto the bottom line of your business. In the
next section, when we cover Business
Valuation, your recast financial statements will be
an important tool when it comes to establishing an asking
price. Recast
Financial Statements
Other
Items You Will Need To Prepare: Lastly, we will discuss
your company's leases, contracts (with customers and/or suppliers),
inventory and assets. And will talk about what you can do
during the preparation phase so that these things add value
to your business in the eyes of the buyer. Other
Items To Prepare
Selling
Memorandum: This a "Brochure" that will summarize
all the highlights of you business for the buyer. A good Selling
Memorandum will help you make a good first impression
on potential buyers. Plus, it will save you a lot of time
as it will put in writing answers to all the questions most
frequently asked by buyers. Selling
Memorandum
Business
Brokers: Finally, if you have already made the choice
to use a broker to help sell your business, here is some basic
advice on how to pick the right one and how to set up the
agreement in your favor: How
To Choose A Business Broker
Sell
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Next: How
To Prepare Your Financial Statements
