Preparing to Sell
There are numerous aspects one need to consider when selling a business. Below I have tried to summarize the biggest areas potential seller need to address before and during the selling process:
1. Determine Your Goals in Selling Your Business
- Define and thoroughly evaluate your reasons for selling
- Consider what alternatives there might be to selling
- Determine if selling is indeed your best option at this point in time
- Work with a financial planner and tax lawyer to structure optimal transaction strategies and your best approach to managing the proceeds of the sale (ask your intermediary for recommendations)
- Determine if the proceeds of the sale will provide the funds you require to sustain your lifestyle
- Evaluate your optimal terms and conditions for sale
- Determine the best possible timing for you
- Are you ready for your retirement?
- What will you do once you sell your business?
- How does your family feel about selling?
- Will selling satisfy your financial needs for retirement or other pursuits?
- Are you interested in continuing to work in the business?
- Do you plan to buy another business?
- Ensure that your books, records and financial statements are up-to-date
- Prepare at least 3 years worth of financial history
- Prepare and provide recast financial statements
- Provide appropriate financial projections and business potential forecasts
- Ensure that you have high quality business marketing materials
- Don't give out too much information too early
- Use sequenced presentations with incremental amounts of information
- Advertise confidentially across a broad spectrum of media
- Ensure that strategic and competitive buyers are carefully and confidentially explored
- Maintain your operation in top shape so that any day of the week it is ready to present to prospective buyers
- Keep running your business as though you plan to have your best year ever
- Don't get distracted by the sales process
- Don't slow down in any area of your business
- Don't stop marketing or try to trim expenses