Prepare for sale: How to get your business in order
it’s probably taken years to grow your business into what it is today, possibly with the view to sell. So why make it hard to find the right buyer, willing to pay the right price, for want of a few months? careful preparation?
If you wish to attract serious interest in your business, it’s essential to commit time and effort to the sale preparation process. And to make a business as attractive to prospective buyers as possible, it’s worth looking at the business from a buyer’s perspective.
Prepare for sale: Books, records and documents
Potential buyers will want to examine your trading history and that means looking through your financial statements. They will expect your accounts probably the last three years worth to be tidy and up to date, and will, in any event, test these assumptions during the due diligence phase.
Reviewing revenues and costs, the buyer will conduct cash flow analysis and profile the sources and usage of cash.
Buyers will also wish to see documentation of fixed assets, examine your liabilities especially any business debt agreements and inspect tax records.
Depending on your sector and scale of operations, the buyer might request a host of other documents, including employment contracts, payroll records, tenders, lease agreements, licences and permits.
Look as if you mean business
Clearly, the physical condition of your premises, its fixtures and fittings and any equipment will be critical in forming that all-important first impression. To prepare for sale, equipment should be well-maintained, properly serviced and clearly fit for purpose.
In advance of its from potential purchasers you should, as a bare minimum, thoroughly spring clean your premises. You may even repaint and refurnish the premises and replace ageing equipment so long as the costs of doing so are not prohibitive.
This is where things get tricky. To prepare for sale you need to decide who in your business needs to know about the prospective sale the fewer the better, lest the information leak out and your staff take fright and start job-hunting or competitors poach your staff or customers.
If customers become aware of your plans, the uncertainty about their future relationship with new owners may prompt them to delay or abandon contract renewals.
Jo joined Dynamis in 2005 to co-ordinate PR and communications and produce editorial across all business brands. She earned her spurs managing the communications strategy and now creates and develops partnerships between BusinessesForSale.com, FranchiseSales.com and PropertySales.com and likeminded companies.