The process of selling a business is difficult under the best of circumstances, but in an economic downturn it is even more of a challenge. In order to realize the highest justifiable sale price, Whitehurst Mergers & Acquisitions counsels owners on how to prepare for the sale of their business. In some cases, preparing a business for sale can take many months, or even years, before the actual event.
How to prepare for the sale of your business:
- Clean up the financials of the business:
- In many cases, business owners take liberties within the “gray” area of business accounting, such as owner perks that are buried in the financials, and often outside of generally accepted accounting principals (GAAP). A clean paper trail from the general ledger to the tax return with easy to trace owner’s compensation line items will provide a clearer picture to the potential buyer.
- Implement sound managerial practices to increase the goodwill component of the company’s selling price:
- Create procedure and training manuals that spell out the steps required for all tasks necessary to run the business. Be thorough and use language simple enough for new employees/owners to understand.
- Develop and begin to utilize a formal marketing plan. It is important for the prospective buyer to see that new customers and markets have been identified, and that the steps are laid out to acquire new business.
- Clean Up!
- A neat, organized, and clean business projects a desirable and professional image. This shows the potential business buyer how well the processes you have put in place work in your enterprise.
- The curb appeal of a business cannot be underrated. First impressions are important! There should be adequate signage and a clean professional look to the outside of the premises as well as the inside.
If the proper steps are taken well in advance of the sale, an owner will stand a much better chance of getting the highest justifiable offers from prospective buyers.