If the time has come to sell your company, there are certain steps you need to take to make your offering as attractive as possible to any potential buyers. One of the first steps you should take is to review your business plan and make sure it is professionally written, researched, and updated with all of your most current information. Some other steps you need to take are:
Pay off any outstanding payments you have not gotten around to paying. The less liability your business has, the better it will look to your potential buyer. Also, if there are any outstanding payments owed to the business, try to collect on them before you sell, especially ones that are over 90 days, as these are often written off as unlikely to ever collect on.
Buyers are looking for a business that has an atmosphere of positivity, growth and continued potential. Talk to some of your employees and customers, see what areas of the business they think could be improved. Your potential buyer will most likely talk to customers and employees as well. By getting their counsel first, you increase the odds that they will give the business a positive report to the potential buyer. This is also one of the areas that your business plan will help you in. Make sure your company looks like the company that your business plan is describing.
One of the most important steps in the selling process is the examination of documents related to the operations and finances of the business. Having these documents prepared ahead of time, will make everything easier for the buyer and make the process go much smoother. Buyers are going to want to confirm that you have paid all of the taxes for the business. Also, they will look at revenue, net income, and tax payment numbers to confirm that the financial statistics you provided them with are correct.
Of course, your company’s summary balance sheet, the document that breaks down your business’ assets and liabilities, must be ready for scrutiny. Having this document ready gives your buyers a one-stop resource for seeing the pros and cons of the business.
Your cash flow statement is also one of the main documents your buyers will want to see. This is a breakdown of all the money that comes into and goes out of the business, including net gain. This tells the buyer how much cash they actually have to work with each month, which is what really matters.
Selling a business can be a complicated and emotional time in a business owners life, especially if you have invested many years building the business up. However, if you have your documents well prepared and the right team around you, the process becomes a lot less stressful and complicated. Your business plan can show you and any potential buyer that the road ahead is paved with profits and provide a quick and detailed snapshot of your business or turn out to be an outdated document that doesn’t reflect your current business at all. Don’t let that happen. Assemble your selling team, make sure you consider all of the issues above, and you should be well on your way to making your business sale a reality.