|
Preparing
to Sell:
The Business, And the Owners, Must Be Prepared
–
Selling a business usually takes considerable time and dedication.
Business owners who seek to sell their business must be well prepared
before attempting to do so. Smart preparation entails advance planning
and the pulling together of important information about the business,
its equipment and other assets, its personnel, its position in the
marketplace, etc.
With
thoughtful and professional preparation, the owners and their business
broker can best demonstrate the reasonableness of the proposed price
for the business, and argue more successfully against suggested
discounts by prospective purchasers. With thorough preparation, Cascade
Business Brokers can represent each owner’s business in the marketplace
more effectively.
Also
key to effective preparation is each owner’s state of mind. A positive
attitude is needed, along with a commitment to taking the time needed
to quickly produce requested information, meet with prospective
purchasers, meet with special advisors as needed (e.g., attorney,
business broker, CPA, etc), analyze offers, negotiate and craft
counter-offers, work with lenders, and provide business closers with
the necessary final
 documentation.
The
double duty process can be difficult – each owner needs to manage his
or her own business first, and at the same time participate in getting
the business sold. Cascade Business Brokers brings order and efficiency
to this process, and saves each owner time and money in the long run.
The Basics – Each owner should have the following information readily
available pertaining to his or her business:
Business Story, Products, & Competition
–
Written descriptions of the business (brochures, product descriptions,
recent advertisements, new articles, etc), history of the business,
market position in the industry, summaries of any exclusive or
long-term contracts for sales, information on key competitors (current
and future), and information on potential changes in the overall
industry.
Financial
Information –
CPA prepared Tax Returns for the past 3 to 5 years, plus interim Profit
& Loss statements (year to date for the most recent quarter), a
current Balance Sheet, and a written summary of current debt affecting
the business. All owners need to commit to keeping the financial
information up to date on at least a quarterly basis during the
marketing process.
Personnel, Compensation & Benefits
–
Current list of key personnel, job titles, pay schedules &
benefit packages.
Buildings, Land & Leases
–
Summary of the facilities occupied by the company, use and status,
ownership, payment schedules, copies of most recent real property tax
statements, recent appraisals (if any), zoning status, statement of any
problem areas, and copies of current leases.
Equipment & Other Assets
–
Current list of equipment, fixtures and machinery, most current
depreciation schedule, most current personal property tax statement,
copies of recent appraisals (if any), summary of any equipment that is
leased and its use, and copies of any long-term equipment leases.
Inventory – Summary and description of inventory, best
estimate of “at cost” value, and number of turns.
Having
the above listed information at one’s fingertips will provide Cascade
Business Brokers with a sound framework for (1) developing a proposed
sale price for the business, (2) the preparation of professional and
comprehensive marketing materials, and (3) skilled and efficient
negotiations with prospective purchasers of the
business.
|
