Preparing to Sell:

The Business, And the Owners, Must Be Prepared – Selling a business usually takes considerable time and dedication. Business owners who seek to sell their business must be well prepared before attempting to do so. Smart preparation entails advance planning and the pulling together of important information about the business, its equipment and other assets, its personnel, its position in the marketplace, etc.

With thoughtful and professional preparation, the owners and their business broker can best demonstrate the reasonableness of the proposed price for the business, and argue more successfully against suggested discounts by prospective purchasers. With thorough preparation, Cascade Business Brokers can represent each owner’s business in the marketplace more effectively.

Also key to effective preparation is each owner’s state of mind. A positive attitude is needed, along with a commitment to taking the time needed to quickly produce requested information, meet with prospective purchasers, meet with special advisors as needed (e.g., attorney, business broker, CPA, etc), analyze offers, craft counter-offers and generally negotiate, work with lenders, and provide business closers with the necessary final documentation.  The double duty process can be difficult – each owner needs to manage his or her own business first, and at the same time participate in getting the business sold. Cascade Business Brokers brings order and efficiency to this process, and saves each owner time and money in the long run.

The Basics – Each owner should have the following readily available pertaining to his or her business:

Business Story, Products, & Competition – Written descriptions of the business (brochures, product descriptions, recent advertisements, new articles, etc), history of the business, market position in the industry, summaries of any exclusive or long-term contracts for sales, information on key competitors (current and future), and information on potential changes in the overall industry.

Financial Information – CPA prepared Tax Returns for the past 3 to 5 years, plus interim Profit & Loss statements (year to date for the most recent quarter), a current Balance Sheet, and a written summary of current debt affecting the business. All owners need to commit to keeping the financial information up to date on at least a quarterly basis during the marketing process.

Personnel, Compensation & Benefits – Current list of key personnel, job titles, pay schedules & benefit packages.

Buildings, Land & Leases – Summary of the facilities occupied by the company, use and status, ownership, payment schedules, copies of most recent real property tax statements, recent appraisals (if any), zoning status, statement of any problem areas, and copies of current leases.

Equipment & Other Assets – Current list of equipment, fixtures and machinery, most current depreciation schedule, most current personal property tax statement, copies of recent appraisals (if any), summary of any equipment that is leased and its use, and copies of any long-term equipment leases.

Inventory – Summary and description of inventory, best estimate of “at cost” value, and number of turns.

Having the above listed information at one’s fingertips will provide Cascade Business Brokers with a sound framework for (1) developing a proposed sale price for the business, (2) the preparation of professional and comprehensive marketing materials, and (3) skilled and efficient negotiations with prospective purchasers of the business.