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8 Critical Steps to Prepare a Business for Sale
Preparation and planning are critical when selling a small business. Business owners who strategically prepare to sell a business years in advance almost always have a better outcome. Set yourself up to find more qualified potential buyers and lock in a successful sales transaction. Follow VR Business Brokers of Charlotte’s 8 Critical Steps to Prepare a Business for Sale.
How to Prepare a Business for Sale
Ready to begin planning for your future? Use the following eight steps to prepare a small business for sale like an expert.
8 Steps to a Successful Sales Process
- Meet with your CPA/financial advisor to plan accordingly for retirement and tax implications on the sale. You need to understand your financial future to make sound judgments in the sales process. (Note: I am amazed at how few people do this.)
- Make sure your spouse/partner/shareholders are all aligned and in agreement on timing.
- Work to make sure your financial statements are in excellent shape and ready for 3rd party review. Potential buyers are going to be interested in your business’ cash flow, a balance sheet, and other financial objectives. They’ll want to see how you determined the value of your company and landed on an asking price.
- Get a third-party business valuation BEFORE you go to market to make sure your sale price is realistic. (Hint: It usually is not.)
- Develop strategies to make sure your customer concentration is not too high. Your customer base should be evenly disbursed, so your top few accounts aren’t accounting for the majority of your business.
- Ensure that your company is not too reliant on a key employee, vendor, or agreement. Your bottom line shouldn’t be severely impacted at the loss of one person or organization.
- Work tirelessly to make sure the business is less owner dependent every day. Your management team should be able to perform at or near maximum value without too much reliance on the new owner.
- Think like a prospective buyer; assess the value of your business critically, and then make the appropriate adjustments while you still own the company.
At VR Business Brokers of Charlotte, we view ourselves as advisors and educators to those looking to prepare a business for sale. There is a lot of misinformation and opportunities for education, and with that in mind, we encourage you to reach out to our team of professionals for guidance. We have years of experience helping business owners value their businesses, prepare exit strategies, and find prospective buyers. To begin preparing your Charlotte-based business for sale, please contact VR Business Brokers.
For more information on preparing and selling a business, watch “9 Steps to Selling Your Business” by Adam Petricoff of VR Business Brokers.