Chances are you’ve giving a lot of thought into selling your business. Many business owners spend a lifetime working towards and dreaming about the day they can put their business on the market. So mentally, you’re probably prepared, but do you know what you’re in for?
Here are three basic things you should be prepared for when selling your business:
1. Be Prepared to Verify Financial Claims
You think you’re sitting on a gold mine, but a potential buyer won’t just shell out more when purchasing your business based on a perceived potential alone. Having accurate and complete financial records will be very important when it comes to business valuation.
The best way to be prepared for a sale is to keep good records, which include accurate tax returns and profit and loss (P&L) statements. Good bookkeeping is all about the details. Being able to thoroughly document your businesses past performance and current state of affairs though accurate books and records will help your company’s valuation.
Plus, a business owner who has a good handle on the finances of their business has more leverage in negotiations because they are more informed.
2. Be Ready to Answer a Lot of Questions
Not only do you need to have your financial ducks-in–a-row, so to speak, you also need to be prepared to answer a lot of question about your business. Prospective buyers will want to know the ins-and-outs of your business, details about your customers, vendors, overhead, staff and more. Some of the questions will seem to be, to you – the simplest in nature and are asked even by the most experienced buyers. Don’t judge. At the end of the day all that matters is if the transaction is completed and both parties are satisfied.
3. Be Prepared to be Completely Honest
By being transparent about your business and honest from the start of the buying/selling process and you’ll have less risk of the deal falling apart during due diligence. No one likes to feels that they are being taken advantage of, or downright lied to – so don’t do it. The truth will always come to light, so be upfront about everything from the beginning. There are no perfect businesses and experienced investors will understand this.
For more on Selling Your Business visit https://www.yourfloridabusinessbroker.com
Michael Shea PA
Board Certified Intermediary
Transworld Business Advisors
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