Preparing your business for sale
Experience has shown that owners who begin several years in advance will successfully transfer business ownership in less time and at a higher price.
Author: Kelly Shaw
Date: May 2015
If you are like most business owners, you spend the majority of your time and attention running your business and not planning your exit strategy. Here are a few very simple tips to help prepare your business for sale.
Clean up the Premises
The goal is to increase your “Curb Appeal.” Potential buyers will base their decision on qualitative and quantitative information. Don’t overlook the emotional reasons why buyers fall in love with a business and having a clean look will add to the feeling the buyers get for your business.
Obtain a Business Valuation
Have a qualified professional prepare a business valuation. In addition, make sure that any valuations for equipment or real estate are updated to reflect the current value of the business. You shouldn’t have to pay the full price for the reports to be updated with the latest information and new reports to be generated.
Inventory that is obsolete or un-sellable should be removed from your books on a periodic basis. Remember that potential buyers will only purchase inventory that is sellable.
Write-off Bad Debt
You should have in place a process for handling accounts receivable that are uncollected. If the AR is included in the sale, then do your best to either collect the money owed or write-off the bad debt. The potential buyer will definitely want to see you AR Aging report to understand if your customer are paying their bills.