What needs to be done before selling your business?

Getting Your Business in Order

So, you have determined it is time to sell your business. If you are like most business owners, you have some housekeeping to do before your business is ready to sell. There is a list of things you will need to gather, organize, fix, or even create in order to highlight your business in the best way possible

Designing your business to sell, as describe in the book Built to Sell by John Warrillow, helps ensure that your business will bring you maximum value when it’s time to sell. If you’re not looking to sell your business in the immediate future, but are ready to make it sellable, we recommend reading the book Built to Sell by John Warrillow.

Gather Your Critical Business Information

No serious buyer will make an offer on your business without knowing the ins and outs of the business. This includes getting to know sensitive and confidential information regarding your business.  Some of the information you’ll need to gather and prepare includes:

·         Finances, Asset Lists, Debt and Payables, Inventory, Physical Facilities and Equipment

·         Business Systems, Technology, Web and Social Media

·         Employees and their roles, List of Customers

·         Description of Competition, Growth Opportunities

·         Franchise and Vendor Agreements

Preparing Your Business for Curb Appeal

Never discount the value of first impressions, including how your business looks and feels to the prospective buyers. Does it look clean? Organized? Well managed? Will the buyer be pleasantly surprised by what they see? It’s important to consider and take steps to improve the marketability of your business to potential buyers.

Prepare For the Due Diligence Process

In virtually every business sale, there will be a period of inspection by a prospective buyer as one of the contingencies of going forward with the deal called the due diligence period. This is a time for the buyer to ask a number of questions and request a myriad of documents for inspection by the buyer, her or his professional advisors. If you have previously taken the time to gather your critical business information, the due diligence stage should go smoothly. Buyers will also work to help the process go smoothly for you, and Vermilion Rock will work to field redundant questions to help the process along.

Analyse and Mitigate Risks

You want to present your business as a stable enterprise to potential acquirers. Being smart and mitigating risks such as revenue concentration, obsolete stock, litigation, doubtful debt etc. is essential to the defense of your earnings. Buyers will not expect a completely trouble free business but they will expect management to be aware of the risks, and where necessary have them reflected in the numbers by way of provisions and have a sensible and cogent plan for each matter going forward.

Vermilion Rock can help you all along the way. Don’t hesitate to contact us.