Preparing Your Small Business For Sale

Selling your business is very unlike running your business day-to-day. Your perspective has to shift to a new kind of customer. The potential buyer of your business may be comparing an investment in your business with a totally dissimilar business with different skills, market and returns.In order for your business to stand out and get the attention it deserves, you can spend some time and money making sure it is an attractive investment. It’s not just about the numbers, but the numbers count. Here are some things you can do to position your business for success in selling.1) Having well organized financial records will bring a lot of credibility. You might use a bookeeper to generate a QuickBooks report, for extra credibility have your CPA review the records. For larger companies, a professional buyer will want to see audited books. Buyers will want to see three years of clean books that match the tax returns.2) Pride of ownership in the business- get rid of broken equipment, obsolete inventory, and general clutter. Consider your marketing image to reflect a relevant and successful company.3) Buyers prefer a business that has well trained, experienced and dependable staff. Good systems allow you to delegate and spend more time working on the business rather than working in the business. Buyers understand good employees are essential to success, and they decrease the load on the new owner.4) Show your processes. This can include documenting how you handle returns, customer credit, shipments, marketing and sales. Make it easy for the buyer to see how they would run your business without you. Documentation isn’t just about financial records.5) Look at your business like a buyer. Buyers hate surprises. Many deals die in due diligence because they discover something the seller has tried to hide, or forgotten to disclose. This usually destroys the trust between the buyer and seller, and the deal can not be saved. Don’t let this happen to you.6) Get your team on board. Your accountant, attorney and key advisors need to understand your desire to transfer the business. It might be time to do some exit planning with your financial advisor.7) Create a vision for the future. The buyer wants some help taking things to the next level, and you can map out a way to get there. If you have future plans for new markets, products or processes, share them with the buyer to help them visualize a great future for the business.Can’t get all this done? Then focus on what you can do, and get a good broker to take you through the process.

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