There comes a point when you have to start thinking about when it might be time to sell your business. I always say you should really start thinking about selling your business from it’s inception, but if you haven’t started to think about it yet, you should now.
Remember the business isn’t worth much if it only runs with you in it. In preparation to sell your business you should have appropriate systems and team in place so that the business can efficiently run without you.
You should also be cognisant of all the documents you will need to present during the sale process. I found the following checklist on Inc.com in an article provided by Mike Handelsman which will help you assemble the documentation you need to be ready for sale.
Prepare your business for sale with the below checklist:
- Non-Disclosure Confidentiality Agreement
- Personal Financial Statement Form for Buyer to Complete
- Offer-to-Purchase Agreement
- Note for Seller Financing
- Financial Statements for the Current and Past 2-3 Years
- Statement of Seller’s Discretionary Earnings or Cash Flow
- Financial Ratios and Trends
- Accounts Payable and Accounts Receivables Aging Reports
- Inventory List with Value Detail
- List of Fixtures, Furnishings and Equipment with Value Detail
- Asset Depreciation Schedule from Tax Return
- Supplier and Distributor Contracts
- Client List and Major Client Contracts
- Staffing List with Hire Dates and Salaries; Employment Agreements
- Organization Chart
- Photos of Business
- List of Opportunities for Improvement with Revenue/Profit Projections for Each
- Business Formation Documents
- Corporate or Schedule C Tax Returns for Past 2-3 Years
- Building or Office Lease
- Equipment Leases and Maintenance Agreements
- Business Licenses, Certifications and Registrations
- Professional Certificates
- Insurance Policies
- Copies Proving Ownership of Patents, Trademarks and Other Intellectual Property
- Outstanding Loan Agreements
- Description of Liens
- Product/Service Descriptions and Price Lists
- Business Plan
- Marketing Plan and Samples of Marketing Materials
- Employment Policy Manual
- Business Procedures Manual
- Other Documents Unique to Your Business
Once you have your documents in order you will need to create a business description that will market your sale in early ads and communications to draw initial buyer interest. Note that once a party is interested, be prepared for your business sale transaction to take time.
Surveys of business brokers show that most sales take six to 12 months to close, with at least 10% of deals taking even longer.
And the reality is that not all businesses sell. Some reasons that can contribute to the lack of buyer interest are unreasonable prices, all-cash demands, unattractive business conditions, and lack of financial, asset and inventory documentation.
Whatever your business challenge is, we can help you starting today.
Simply click the link below to schedule your free 30 minute, no obligation, phone consultation. We’ll focus on your #1 challenge, and at the end of the call we’ll give you at least one practical strategy so that you can move forward immediately.
Schedule your free 30 minute
business assessment session today!
Or you can follow the link and our business experts can provide a Complimentary Business Evaluation for your business.
Start increasing your bottom line today.