One of Transworld’s core values is small business advocacy a key component of which is sharing educational information and resources with clients and our community to help them make informed decisions for the future of their business. So today we will begin working our way through the 12 step process of selling a business, starting with Preparation.
Preparing for the sale of your business is key to ensuring the process goes smoothly, your business broker is able to help you to their fullest capacity and you are able to reap your highest return on investment. Proper preparation includes the following three areas:
Financial Documents & Records
It is of the utmost importance that your finances and their associated records are in order and easily accessible. The most important documents you will be sharing with your broker are your past three years of Profit & Loss statements, Balance Sheets and Tax Returns. This information is not only required for your business broker to complete a valuation of your company, but they also contain details needed for marketing as well as the due diligence step of the sale process.
Who manages the day to day operations of your company? If it is a manager and you already have one in place, that is great! If it is you, than it would be wise to train a current employee to take over your many roles or to hire a manager to complete your responsibilities. Having well-trained management in place is key for prospective buyers. First, it is an attractive quality to see in a business because it will make transitioning to new ownership easier, but second it lets a buyer know that when you exit the business, it won’t completely fall apart. The more a seller can remove themselves from daily operations, the more saleable their business becomes.
Imagine you are looking to buy a business instead of sell a business. As a buyer you would want a prospective business to be as ready as possible for you to step into the ownership role and for operations to continue on as usual. From the seller’s standpoint this means developing a detailed transition plan taking into account your full operations including employees, vendors and customers. The easier and more simple it is for a buyer to take over your business the better!
The Preparation step of the sale process may sound like a lot to take on, but when it comes to selling your business there really is no such thing as too much preparation. For more information on our business sales process and how we can help you prepare please visit our website or schedule a free consultation now!
Rachael Holstein joined the Transworld Team in 2016 as Marketing Coordinator. Her working experience has been largely focused on Business Development and Marketing in the finance, architecture, property management, and information technology industries. A long time resident of Cleveland, Ohio, she attained her Undergrad from John Carroll University and a Master’s Degree in Global Interactions from Cleveland State University. She relocated to Denver in 2013 for a change of scenery and a bit of adventure.