Tweet

How To Prepare To Sell A Business

Guest post by: Global BX

Article Overview: Business owners invest much time and effort into their businesses, and most arrive at the hard decision to sell their businesses at some point in time. There are various reasons for selling a business, and although each circumstance is unique, most owners have similar incentives and concerns. It is an emotional and difficult process, and the most advantageous deal is achieved by understanding the steps and factors that determine the best time to sell.

How To Prepare To Sell A Business

Business owners invest much time and effort into their businesses, and most arrive at the hard decision to sell their businesses at some point in time. There are various reasons for selling a business, and although each circumstance is unique, most owners have similar incentives and concerns. It is an emotional and difficult process, and the most advantageous deal is achieved by understanding the steps and factors that determine the best time to sell. After the decision to sell has been made, there are a number of preparatory measures that make your company more appealing to potential buyers, and they may take from two to twelve months to implement.

Financial Statements

You should obtain the most recent profit and loss statement from your accountant. It is preferable to also get the past two to three year's statements to show a historical trend and profile. The profit and loss statement shows both parties the income earned and costs incurred in the accounting period, the difference of which is the net profit.

You should address how you can strengthen or better document your company's financial health. Many owners minimize taxable income by using techniques to hide their earnings, however the smart buyer will recognize such tactics. Buyers will normally recognize the company's observable profits and will not pay for earnings that are not clearly documented. Since businesses are bought on a basis of multiples of earnings, the investment of taxes paid for a year or two would be repaid in multiples of that amount in a sale.

You can increase buyer confidence by having your statements audited which will accelerate the selling process and prevent delays in closing the sale.

Physical Condition of the Facility

The condition of the business facility indicates how you operate your business but more importantly, it gives potential buyers a good impression of what they are buying into. You should do what is necessary to make your business facility more presentable such as repainting the interior and exterior, reconfiguring the business to convey a productive and efficient working environment, making minor repairs, or simply removing garbage from the storage and work area.

Business Records

You should organize your business records such as any articles of incorporation, tax records, leases and contractual agreements, and payroll records. You should gather documentation relating to patents, trademarks, copyrights, licensing or franchise agreements, and bank loans.

If your business requires a license or permit to operate, ensure that it is current and readily transferable. You should get a hold of the necessary paperwork that would help transfer the license or permit to the new owner.

Businesses are either located in a leased or owned facility. If it is leased, you should check that you have a copy of the lease for review. Potential buyers are concerned with the lease terms, especially with the number of years remaining on the lease. It is optimal to have at least three years remaining which can be transferred to the new owner. You may want to negotiate with the landlord for an extension or an option to renew, and you should find out the conditions that must be met for a lease transfer, assignment, or sublease. If the facility is owned, you should have the property appraised.

Related Articles
  Ain't Nobody's Business but Your Own
  Easy Steps To Prepare Your Marketing Plan For Your Business
  Who Else Wants to Get Rich Slowly Selling Insurance?
  Sales Talk Versus Sales Babble
  Six Characteristics of Leaders
  Prospecting's 8 Simple Steps©
  Pitching to Win and Winning that Pitch
  Starting a New Business: It's Not How Much You Prepare But How You Can Adapt
  Are The Majority Of B2B Salespeople Allergic to Paperwork Even Though It Means They Are Missing Out On A Competitive Advantage?
  Preparing for Sales Training - Becoming Change Ready
  Five Tips for Creating C-Level Selling Confidence
  Chance favours the prepared
  "Top Ten Questions about Selling a Small Business"
  How to Ramp-Up New Salespeople in 90 Days
  Timely Tips for Unlocking Great Sales in Today’s Tough Economy
  Wills: Software Package vs. Lawyer
  15 Sure-Fire Ways & The Top 10 Questions To Ask For A Successful Job Interview
  How to get your Bank Manager to sanction your loan application
  Preparing to Handle Independent Sales Reps
  Poor Chicharron Vendors Expand Their Business

Article Tags: business brokers, business for sale, businesses for sale, sell a business, sell biz, selling a business



Related Forum Posts
My entry - 1. The Best Business Books Ever: The 100 Most Influential Business Books You'll Never Have Time to Read - this is a fascinating book about the history of Business theory, and I'd recommend it to anybody. 2. The Big Book of Small Business: You Don't Have to Run Your Business by the Seat of Your Pants, by Tom Gegax. Ditto. 3. PADI: The Business of Diving Book Okay, so this book won't be of use to anyone who doesn't want to start a scuba store, but I did, and this book was of course invaluable to me in reaching that goal.
Re: Hi there - Welcome to the forum It Starts with you Prepare Doing business online is not much different than doing business offline, except for the obvious differences; location, brick and mortar, leases, licenses, signage, business cards and letter head, etc. First Advise: Prepare: It is not a simple, single step, sign up. we do all the work for you and sit back and collect your money process What do you already know about business and it its various functions, products and pricing, sales and marketing, distribution, after sales support, etc. You need a plan(s); plan for your business, plan for your marketing, a financial plan and a personal action plan. what do you and your business need and where are you going to get it. Most offline business start from an interest, a hobby or a passion. (sure you get buy a franchise and they train you, but this is going to be your business) Online should not be much different : What is your passion? [quote="galuhsitra":3vf2qp5q]I dont have specific skill i think.. I love swimming, reading, and all about cats.. I love animals, mountains, and water..[/quote:3vf2qp5q] Then Google find product or services that help fulfill your passion. Pick perhaps 3 or 4 and do your own due diligence, Join 1 or 2 and take responsible for your decision You are at a great advantage that you found us (EvanCarmichael) with your question. Move around the site, look at other tabs, subjects etc. Plenty of help and expertise here for free.
Magnetic Ads - Biz Idea - Attn Young Entrepreneurs looking for a Business Idea. This came to me while sitting in Traffic for about 1 hour while looking and laughing at ridiculous bumper stickers. Note: this idea is rough but will help get the idea-momentum going. Idea: Sell advertising on the back of cars in the form of reusable magnetic signs (about the length of 2 or 3 bumper stickers) Most people shouldn't have reservations to participating if they get a cut of the monthly fee you charge the company advertising and it doesn't hurt their car. An example of a Magnetic Ad: Geico: I saved 15% on my Car Insurance. Call 1-800-U-SAVE-15 You don't have to pay the cost associated with creating the Magnetic Ad because you will advise the company that this belongs to them and you can get them in touch with someone who created reusable magnets. So your basically managing two sides: 1. Company's that want to advertise 2. People in your neighborhood (to start) who will put the ads on their car. Bigger cars can have more than one ad. Happy Money Making!
Exclusive: Interview with Results - Hi Forum Members, I'm helping start up a Business Coaching and Consulting company here in Toronto, Ontario, Canada (a Subsidiary of RSC Business in Los Angeles). As a Research and Development Intern I am required to practice my listening and interview skills by surveying Small and Medium Businesses on thier Business. This Survey is designed by RSC Business to also assist the Business being interviewed more insight into their own business. I am looking to interview about 30 businesses across North America over the span of 3 months. At the end of these interviews I will be publishing a report of the results and they will be made available for free to the Interviewees. The Report data will include responses from a minimum of 100 interviews. I would like to extend this opportunity to members of the Forum. If you would like to have this short 20-30 minute interview conducted on your Business and you reside in North America please send me an email or PM. Please contact me at andy[at]jvprosperity[dot]com to arrange our interview and to get free access to the results when they are published.
Your advantage over others - Sell using your USP - unique selling proposition. Why should people buy from you, instead of your competitors? Think about it, why are you so great? It may be a hard question, but finding the answer can multiply the effectiveness of any advertising or marketing activities you undertake.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

What To Do With a Troublemaker?

You Have A Website What Now

How to Conduct a B2B Marketing Content Audit

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.