Most business sellers do not realize this but selling off a business is a major step. Here are a few steps you can take to ensure your business is prepared for the sale.
The way your business premise appears is crucial to ensure expedited sales. Keeping the business premises neat and clean as well as organized is crucial. When potential business buyers visit your office premises, having a clean office can go a long way in creating a good impression.
The condition of your machinery and plants is also crucial when you are about to sell the business. Make sure the equipment you use is on a service plan and maintenance schedule. Ensure that the critical machinery pieces operate optimally. Most potential buyers will ask you these questions so ensure you have these updated.
Information on customers
The information you have about your customers should be updated. You should be able to identify all the key revenue-generating and top customers in your list. Always know your customer and target audience because the potential buyer will ask such questions.
All company operations and procedures should be documented appropriately. If the business encompasses complex processes, all workflows should be properly documented replete with flowcharts, instructions and the like.
Ensure that all of your employee resumes are updated and their profiles are easily accessible. All information such as contact details and other pertinent details should be updated.
You need to have a thorough stock check or knowledge of how much your inventory contains. This way, you will be able to provide an accurate estimate of exactly how much the business inventory contains.
Before you start selling the business, you need services from a reputed and qualified lawyer. This should be ensured before the selling process starts.
You should also consult with your accountant before you sell the business. The accountant can help determine the best price for selling. You could also consult with a valuation expert who can help set the appropriate selling price for your business. The accountant will also be useful in keeping the books organized, understanding implications of tax as well as filing issues, which arise during the sale.
The first thing any potential buyer will ask for will be your financial statements. Hence, you need to ensure these statements are in proper order. The best option is to have three years of financial statements prepared by your accountant. This usually suffices for any potential buyer.
You need to declare all your cash sales. Not declaring this aspect can mean being in the bad books of the IRS. If you have not declared your cash sales then these are difficult to prove to a buyer, especially if they are not visible on financial statements. You actually lower the declared earnings and this in turn can lower your business valuation. Thus, your selling price will automatically be lower as a result.
Investing some time in performing a bit of analytics will help you prove your business’s potential to a buyer. Using figures and statistics will prove your point better than vague claims.