Business Brokerage .
Steve Skrlac, MBA, CFA
sales representative
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Sell a Business - Have a Strategy
The Strategy Before you Sell
When you finally decide that the time is right to sell a business there is significant work that can be done before you actually can go about showing your business to potential buyers. There is much information that buyers will need and they will have certain expectations that will need to be met in order to successfully sell. Here is a sampling of things buyers will look for in their search the business for sale listings.
Overall condition of the business
If you want to sell a business one of the first things you should check on is the first impression the business gives. A clean and orderly business will make a great first impression on any potential buyer and should not be overlooked.
Customer records
Do you have an up to date listing of your customers’ records? When you go to sell a business one of the first things that a potential buyer will ask for is the status of the current clientele. Neglecting this important information will not serve your goals as a business seller.
Condition of your equipment
Have you done regular maintenance on your key pieces of machinery? Do you keep service records? Is everything in good working order? When you go to sell a company, ensuring the actual machinery &equipment of your business is working well is crucial.
Operating procedures
If you have more than a simple, straightforward business then a potential business buyer may ask for some well-documented procedures. Especially if there are precise processes that must be followed that are crucial to the operation of the business. When you decide to sell a business please ensure your operations are in order.
Employee information
Please ensure that you have current employee information on file with resumes as well.
Inventory
Have a current inventory count done. Remove any inventory that is no longer usable and maintain an accurate record. Business buyers will want to have a clear picture if a business’s inventory situation.
Think about legal representation
Getting a lawyer early in the business selling process is an important step. A lawyer can help you to structure your deal so that when you are presented with an offer you will not be at a disadvantage. Selling a business is much more complex than a basic real estate transaction and care should be taken. A lawyer can help you sell a business in many different ways: go over a purchase agreement (or letter of intent), obligations pertaining to your premises and equipment leases, your responsibilities (and liabilities) you have with your employees, Vendor financing that you may extend to a business buyer, franchise agreements and your obligations to a franchisor, etc. Getting a lawyer early on is something that is strongly advised.
In addition to legal representation, when you are ready to sell your business it would make sense to discuss succession and transition planning as well.
Using an accountant for the sale
You will want to have good financial information on hand to present to a buyer when you decide to sell a business. Ensure that your books are in order and have detailed financial information on hand, because a buyer will ask. Have at least three years of accountant-prepared financial statements available, income tax returns, sales tax returns, bank statements, the most recent year’s financial information, employment tax filings, inventory schedule, AP and AR schedules, etc. As you can see… there is much more to selling a business than a simple real estate transaction. Find a reputable accountant if you don’t already have one.
Contact us - we will go over the business selling process with you and describe the steps in detail. We will also let you know what else you can do to maximize you business value.
When you're ready to start the process of selling your business please contact Steve Skrlac for a confidential consultation.
