Thinking Of Selling? Get Ready Now

Online, February 27, 2011 (Newswire.com) - When you started your business, perhaps you gave no thought to what might happen if you ever decided to sell. But what if that becomes the case?

If you are thinking about selling your business, you should take steps to be sure you get the most money possible for all your hard work, and that the process is as swift and painless as possible.

The first thing potential buyers will want to see is your financial records. You should be prepared to provide up-to-the-minute profit and loss statements, as well as a current balance sheet. Most buyers will want to see three years of earnings to decide how much of a business loan they can get from the bank - the bank will want to see this as well. If you can't get a bank loan, then you have two choices: finance the sale yourself or sell for less.

Up trends are very important. A buyer will value your business' future earnings based on past results. If the numbers are rising, future earnings will as well. Sell your business when that bottom line is pointing upward.

Buyers often place a value only on what they can see - this means what's in the bank and on the tax return. You may pay more taxes today, but you'll get it back when you sell.

You should be sure to separate your fringe benefits from real expenses. Only run legitimate expenses through the business - stay away from mixing personal and business expenses.

Be sure you have proper management and staff in place. Hire and train a manager you can delegate to before you try to sell.

Build in some room to grow in your business. If your business facility is cramped, or limited by equipment or location, this will have a definite negative affect on your valuation. Sell before your business gets to this point, or buy needed equipment or move to a larger location before selling.

Your business' value will be higher if everything works and looks nice. Buyers will want everything in order on the day of closing.

Be sure you control, manage and document your inventory. If it's old, donate it or mark it down. Your balance sheet will shine and so will your business ratios.