You only sell your business once. So it is crucial to get it right the first time. When the perfect buyer emerges with a great offer, it pays to be prepared and “strike while the iron is hot.”
No two deals are alike, every transfer of business ownership is unique. However, there are some common requirements that all sellers need to fulfill in order to get the deal done when they have the opportunity. The more you prepare, the more successful you will be…Guaranteed!
Unfortunately, there are many great businesses that never get sold simply because they do not have the required financial data or information readily available when a buyer is ready to move and makes an inquiry/offer. The truth is you can have an industry leading business with outsized margins and high scalability. But if the seller can’t “Show the Money” in black and white , the chances of the business getting sold are slim to none. We as professional business brokers see it all the time and it is a shame.
If your books are not in order and you can’t provide financial statements in a timely manner; a deal can and most likely will unravel real quick.
A seller can be assured that a buyer will scrutinize a business with a lot of intensity. Here is what you need to get past 1st Base with a potential acquirer once they have identified your business as a viable opportunity.
Be sure to have these on hand:
Past Three Years P&L Statements;
Past Three Years Balance Sheet;
Current YTD P&L and Balance Sheet;
Past Three Years Tax Returns;
A Provable Paper Trail for Cash Not on the Books;
Also, Be ready to furnish other documentation — particularly during the due diligence phase — when you will probably be asked to produce insurance policies, employment agreements, customer contracts, lists of patents issued, equipment leases and bank statements.
You will also want to spruce up your business to make it attractive to buyers. Make any needed cosmetic improvements to the premises, get rid of outdated inventory and make sure that equipment is in good working order.
Prepare for your exit by executing what is said in this article and your chances of success will increase dramatically. If you are serious about selling and want more guidance on this process contact us- Lisiten Associates (212) 661-4160 We will be glad to help EXPERIENCE THE DIFFERENCE….
