You never know when you will want to sell your business and the majority of businesses I have seen for sale on the market have not been prepared for sale.
If you own a car or a house your would have a better chance of selling it if you make it presentable to prospective buyers wouldn’t you? so why don’t business owners do the same thing?
If you have secured the services of a business broker they will help you with this if they are experienced in your type and size of business.
Here are some questions that may help you.
Q. How long in advance should I start to prepare the business for sale?
A. This will depend in part on the age of the business but let’s say the business is over 5 years old, you should have it prepared for sale not less than 3 years prior to your planned or unplanned sale
Q. What a buyer is looking for!
A. There are 2 main areas as a starting point
- A good summary about the business this is known as an IM (information memorandum) this document would normally be adjusted based on the type and size of the business but between 6 to 20 pages in length
- Organized financial statements – made up of the Balance sheet and Profit and Loss Statement for the last 3-5 years
Q. What are the other main details a buyer will need to know?
A. This is a never ending question so lets list a few items on the priority list
- Information about the management team
- The true costs the current owners are taking or not taking from the business.
- Staff turnover information – If the staff turnover is too high then this will be a red flag
- What systems are in place for the business
- A good breakdown on the assets and liabilities of the company
If your business has been in operation for more than 5 years we may be interested in purchasing it from you so contact us about confidential discussions for a pending sale now or in the distant future for your business.