Want to sell your business? Start prepping now.
Selling a company requires more preparation than some business owners might think. In an article for Entrepreneur, contributor Brad Sugars encourages potential sellers to start preparing a year before they intend to pass the baton.
Why so early?
"If you actually take the time to prepare your company for a sale, you'll more than likely jump to the top of a buyers' short list, simply because most sellers don't do the proper 'prep work' to make the sales process easy and transparent," he writes.
Sugars offers the following advice on setting your business up for a smooth and lucrative sale.
- Make sure your data is in order— that means organized financial paperwork and thorough documentation of everything. Prepare a detailed account of every role within the company and what each team and individual's responsibilities are.
- Know which valuation models your industry uses. This information will guide the rest of your preparations.
- Assemble an information and sales package. This should include marketing material samples, contracts for team members, and a summary of your business's financial status. Additionally, writes Sugars, you should include an inventory of any physical assets (e.g. equipment).
- Have a firm idea of why you are selling, and make sure your business's management team is in the loop.
- Strategize and organize everything — even the seemingly small stuff, such as password and account ownership transfers.
- Find out exactly how much you need to pay in taxes after the sale is complete. You won't want to relinquish more than you have to.
Preparing to sell your company is a long and involved process, but you don't have to do it alone. Working with an M&A advisor will greatly improve your chances of striking the most profitable deal possible.