| For most people, selling a business is a | | | | for their evaluation.b. Make sure you have |
| once-in-a-lifetime event. It can be an emotional | | | | supporting documentation for nonoperational |
| and stressful time for the owner. To optimize | | | | expenses (fringe benefits such as your personal |
| your success in selling your business, it is | | | | health insurance).c. Prepare a simple list of the |
| important that you plan ahead. Here are a few | | | | business's important furniture, fixtures and |
| important topics to consider when preparing | | | | equipment.d. Document your inventory. If it is |
| yourself (and your business!) for the sales | | | | stale or obsolete, put it on sale or donate it. Your |
| process. | | | | inventory should be lean and moving.e. Clean-up |
| 1. Be ready to sell. There is no sense going | | | | your accounts payable and any pending legal, |
| through the motions if you are not mentally and | | | | employee or environmental issues. |
| financially committed to selling the business. | | | | 5. Organize your legal paperwork such as |
| Discuss the sale with your spouse or partner in | | | | operating licenses, property leases, customer |
| advance. Evaluate your financial needs so there is | | | | agreements and insurance documents. |
| less hesitation once an attractive offer comes | | | | 6. Consider your employees. Decide how and |
| your way. | | | | when you will communicate the sale with your |
| 2. Discuss your goals with your advisors before | | | | employees. Because of the uncertainty involved, |
| you have an offer. To avoid delays and | | | | most business owners wait until the sale is |
| misunderstandings, do not wait until you have an | | | | imminent (or done) before sharing the news with |
| offer in hand to consult your advisors. If your | | | | their employees. A buyer is likely to keep your |
| attorney is not well-versed in small business | | | | employees after the sale is completed, so treat |
| transactions, interview others. You are unlikely to | | | | employees with respect during the sales process |
| reach the closing table if your advisors do not | | | | to avoid any last-minute issues. |
| clearly understand your ambitions. | | | | 7. Improve your curb appeal. Tidy your working |
| 3. Understand the true value of your business. | | | | space - first impressions make a big difference! |
| Most owners have no idea of the value of their | | | | 8. Brainstorm on ways to grow the business. All |
| company since small business valuations can be an | | | | buyers are looking for ways to add to the work |
| art AND a science. Consult a business sales | | | | you have done by improving sales or cutting out |
| professional (who is typically NOT a tax | | | | unnecessary expenses. If you have ideas, be |
| accountant or business attorney) for an | | | | prepared to discuss them with the potential buyer. |
| explanation of how small businesses are valued as | | | | 9. Know why you are selling and be prepared to |
| a multiple of seller's earnings. | | | | tell the prospective buyer your reasons. Most |
| 4. Update your company's financial statements | | | | buyers are curious to why you are selling and will |
| and understand the nature of you firm's revenues | | | | ask for an explanation. |
| and expenses.a. Buyers will typically require 2 to 3 | | | | 10. Run your business as you normally would - |
| years of financial statements (profit-and-loss | | | | now is not the time to take long vacations or let |
| statements, balance sheets and/or tax returns) | | | | sales slip! |