How to Prepare Your Business for Purchase
When preparing to put your business on the market, there’s a lot to consider. How much is it worth? What are buyers looking for? What should you include in the sale? And what do you need to do to prepare your business for sale? Here’s an overview of the steps you’ll need to take before putting your business on the market.
Before You Sell Your Business
Before you start advertising, a few housekeeping tasks will improve your chances of a sale. Buyers are looking for businesses that are low risk and with a good chance of growing in the future. Taking the time to prepare your business now will improve the chances of a high financial return.
Determine how much your business is worth. The valuation you get for your business can make or break a proposition. Hiring a professional to do a complete valuation will help provide a realistic estimate of what your business is worth. Our team conducts business valuations to review a business and its competitors. We consider inventories, assets, sales, receivables, and outstanding debts and liens to help you determine the market value for your company.
Organize tax returns and financial statements. Potential buyers are looking for complete transparency, so you can expect a thorough inspection of all your financial records and tax returns dating back at least three years. Books that are messy or incomplete are a huge red flag for prospective buyers. Now is the time to work with your accountant to ensure your books are in order and everything is accounted for.
Jump-start Sales – Do not wait for your business to flounder to put it on the market. If you know that selling is in the cards, take time to strategize for short-term success. This may mean diversifying your customer base, offering promotions, and pushing out inventory. Investing in marketing, operating systems, and new fixtures may seem like a waste, but it has the potential to boost sales, as well as your bottom line.
Timing – These steps take time, so it’s important to plan for the sale of your business well in advance. Ideally, you should start planning one to two years before you want to sell.
Pillar & Company provides business valuation and succession planning services to small business owners in Naperville and the surrounding areas. If you are thinking of selling your business in the future, it’s never too early to start planning. Give us a call today to learn how we can work together to make the sale of your business a profitable success.