Steps to Preparing Your Business for Sale
These are the most common steps to prepare your Business for sale:
Step 1 – Your initial decision to sell your business, reflecting your true and honest motivation.
Step 2 - Avoid discussing your plan to sell the business with even your most trusted employees.
Step 3 - Organize your financial records, as every buyer will want to review your profit and loss statements. Make certain these records are as up to date as possible. Be prepared with a copy of your property lease and any other financial documents, such as your inventory, your accounts payable, and your accounts receivable.
Step 4 - De-personalize your business. This may mean removing your name from menu items such as “Mary’s Meat Loaf” or “Harry’s Hot Dogs”.
When sellers are so involved with the business, a buyer’s concern is that business may go when the seller does. This step may even include removing many personal items from business elements.
Step 5 - Remove items (clutter and junk) that are no longer needed or used in the business. (Buyers are impressed with clean and clutter-free businesses). We have seen that organized business tend to sell faster and for higher amounts than businesses that are disorganized and in disarray.
Step 6 - Contact a professional Business Broker who can provide a valuation for your business. The Business Broker will offer a Market Price Analysis based upon a realistic price to help you determine if this is the right time to sell your business.
Step 7 - Make certain that the Business Broker has sufficient information and documentation when marketing your business to buyers so that he or she may adequately provide details.
Step 8 - Plan to be available to meet with buyers brought to you by your Business Broker and be prepared for difficult questions from qualified buyers.
Step 9 - Plan to work as a team with your Business Broker to position your business to its best possible advantage.Step 10 - The most important step. Be honest about your business. Once a buyer discovers that something is not as you described, the buyer will worry about the possibility of other statements not being true and will move on to the next business.