The best time to prepare a business for sale is usually before a buyer appears. If you’re wondering how to sell a business for the best possible price, preparation is where it starts.
Owners who organize their businesses in advance can make due diligence easier, support a stronger business valuation, and present prospective buyers with a clearer picture of what they are acquiring.
1. Organize Your Financial Records
Have current financial statements and tax records readily available. Clean records are the foundation of any credible business valuation.
2. Separate Personal and Business Expenses
Buyers need to understand the true economics of the company.
3. Document Adjustments
If legitimate discretionary or non-recurring expenses will be added back to earnings, maintain supporting documentation.
4. Review Your Lease
Know the expiration date, renewal options and assignment provisions.
5. Reduce Owner Dependency
Create systems that allow the company to function without you making every decision.
6. Strengthen Management
Reliable employees and management can be valuable to a prospective buyer.
7. Review Customer Concentration
Dependence on one major customer can create risk.
8. Organize Contracts and Licenses
Determine what is transferable and what approvals may be required.
9. Review Equipment
Identify owned, leased and financed equipment.
10. Understand Inventory
Know approximately how inventory will be valued and treated at closing.
11. Maintain Confidentiality
Don’t announce a potential sale prematurely.
12. Develop an Exit Plan
Determine what you want from the transaction beyond price.
Do you want to retire immediately? Stay temporarily? Retain real estate? Sell everything? Finance part of the purchase?
These decisions can materially affect transaction structure.
Planning to sell? As an experienced business broker in Miami, WeSellBiz.com™ can help you prepare, understand your business valuation, and plan your exit. Contact us before going to market for a confidential discussion.