Many business owners dream of a financially lucrative retirement when a business is sold. This does not happen by accident – a business owner must first create and sustain a profitable enterprise that can be sold.
Many business owners find themselves unprepared for the process of selling their business, expecially if they are not familiar with the complexities of a business sale. Once you have decided to sell your company, there are several steps you need to take to prepare your business for sale.
1. Gather pertinent documents
It's never to late or to early to start preparing to sell. First, you need to understand what it is worth within the context of your industry and the market for businesses like yours. Start by gathering all of the pertinent financial documents, including:
- Three Years of Audited Financial Reports
- Five Years of Auditor’s Letters and Replies
- Most Recent Unaudited Statements with Comparables to the Prior Year
- Company Credit Report
- Inventory Schedule
- Accounts Receivable
- Accounts Payable
- Schedule of all Indebtedness and Contingent Liabilities
- Schedule of Fixed Assets
- All Equipment Leases
- List of the Company’s Business Locations
- Copies of All: real estate leases, deeds, mortgages, title policies and surveys
- Copies of Patents and Trademark Information
2. Find a business broker
Next, consider hiring a business broker, who will take this information and create a market-savvy opinion of value, market your company for sale, help you get the best price possible, and work with you through closing and the ownership transition.
Before you decide on selling your company, you owe it to yourself to call Transworld Business Advisors. There is no obligation, just a confidential conversation about how to sell your company and how much it is worth, now and in the future!
3. Keep your business in good shape, and stay engaged
With retirement on the horizon, its easy to become disengaged from the business when it's time to sell. This can greatly affect how much your business may be worth to potential buyers. It is critical to keep your business in good shape as you move toward retirement.