10 Steps to Prepare Your Business for a Sale

Selling your business is like nothing else you will ever do. The stakes are high. The investment is massive. The potential payoff is great. Much of what happens next depends on how well you prepare your business for a transition. Here are 10 steps for getting the most out of a business sale:

 

  1. Ensure you truly want to sell, and not that you’re doing so because of burnout, frustration, or financial issues. The buyer will want to know what motivates the sale.
  2. How’s your business’s curb appeal? Go to the physical location and look at it as a buyer. Is it damaged? Does the business look like a thriving operation?
  3. How does the interior of the business look? Buyers will want to see a well-maintained building. Remove water stains, burned out light bulbs, and other simple problems. If there are deeper issues, such as holes in the wall or cracking paint, fix those too.
  4. Are your internal policies and procedures clear and consistent? Do you have detailed job descriptions that make it possible for someone to run your business and manage your team without your help and oversight?
  5. How strong is your management team? Can they operate independently? Are they expert managers? Do they fix problems or create them?
  6. Do you regularly conduct employee evaluations? Does each member of your team know where they stand and what they need to do to ensure optimal performance?
  7. Do you have all of your current financial paperwork ready and available? Nothing kills a deal more quickly than due diligence gone awry. Ensure you can access these documents, and that they paint an accurate portrait of your business.
  8. Have you filed all of your tax returns? Are your tax payments up to date? Is your entity set up to minimize tax liability? What about payroll taxes? Are you up to date, and in compliance?
  9. Do you understand due diligence? Are you ready for it? Do you have an advisor who can help you navigate the process?
  10. Are you a valid legal entity? Is all of your entity paperwork up to date? Do you have a board? Is there a possibility you owe dues to your state division of corporations? Ensure there is an actual entity here, or you may be left with nothing to sell.