What are the top six things I can do to prepare my business for sale?

  1. Get your financial statements in order. This means making sure, at a minimum, you have Notice to Reader or Compilation Engagement accountant prepared financial statements. However, Review Engagement or Audited financial statements, are the preferred level of accounting for financing and transactions as there is a higher level of assurance in the accounting process.
  2. Get your business process in order. If you have an operation manual make sure it’s up to date. If you have an employee process handbook, it too should be current.
  3. Begin grooming your second in command to run the business. If it’s the intention of the business owner to step away after the sale and make a clean and prompt exit then training your top manager or second in command to step into the seller’s shoes will be very important to prospect buyers and increase the attractiveness of the business.
  4. Ensure that you minimize the business’ dependence on a single client or supplier. The less dependent the business is on its top five customers the more attractive the business will be for prospective buyers.
  5. Have a robust and positive sales pipeline. There is nothing better in a business sale process than having a consistent year over year growth. The ability to show a buyer prospect that sales will continue without them will make the business more attractive.
  6. If you have longer-tenured employees find out what the potential severance liability will be to the current business owner and how this would play out in a perspective transaction when the employees are assumed by the buyer.