Selling A Business

Our Nine Step Process to Selling Your Business

Step 1. Getting the Financials in Order

This is an important step so a Fair Market Value can be established for your business.  You will need a minimum of three years Tax Returns, Profit & Loss Statements and a current Balance Sheet.  After receiving those we can Recast the numbers to come to the true Owner Benefit, which both a potential Buyer and Lender will want to see.  We can also, in most cases, get a Pre-Qualified Letter from the Lender, which is a big plus to Buyers.

Step 2. Preparing an Equipment List and Present Inventory List

Is the equipment newer, is it owned or leased?  If leased, can it be transferred to the new owner?  As for the Inventory, is there any obsolete Inventory included in it?  If there is, dispose of it.  What is the average turnover of the Inventory?

Step 3. Employees

Having a list of your employees, that includes what their duties are and their Salary plus any bonuses paid to them.  Also, a list of any 1099 Independent Contractors you pay, along with what they do and what they are paid.

Step 4. Property

Is the business leasing the property or do you own it?  If leased, is the landlord willing to transfer the lease to the new Buyer?  If you own the property, is it included in the sale (appraisal to be done) or do you wish to lease it to the new Buyer?  Or are you giving the option to purchase or lease to the Buyer?

Step 5. Customers

When viewing your customer list, is there diversity and not one customer who is 60% of your business?  Buyers and Lenders do not want to see a customer who represents more than 15% of your sales.

Step 6. Aging Report

Buyers and Lenders again do not want to see an Aging Report that is showing that you are waiting over 90 days (maximum 120 days) for accounts to be paid.  We will work with you on this.

Step 7. How the Business Shows

When a Buyer comes to view the business, they are looking to see a clean and organized business.  They do not want to see items laying everywhere and looking filthy.  Before it is put on the market, make sure any personal items are removed so there is no confusion on what stays and what doesn’t.

Step 8. Confidentiality

This is the most important thing to maintain.  You do now want your employees knowing, because many times they start looking for a new position.  They may not know if the new owner is going to keep them.  They also tell people that you are selling.  You do not want your suppliers to know, because they may put yo uon a COD basis and they may let others know that you are selling.  Lastly, you do not want your customers to know, because they tend to look for another business to go to because they don’t know what the new Owner is going to be like.   

Step 9. Confidential Marketing

This is very critical:  we do the opposite of selling real estate.  With real estate you want everyone to know that your property is for sale.  As with your business, you don’t want anyone to know.  We have a database of buyers and we literally market worldwide, because there are many VISA Buyers looking for a business.

To Start Your Exit Plan, please call us at (800) 447-0507 or email us at Info@FreedomBusinesses.com.