Thinking about selling your business, but no idea how to gets started? Here are some things to consider to get the process rolling.

Business sellers checklist

1. Keep your bookkeeping house in order. Do not wait until the end of the year or when you place your business for sale to have your accounting or bookkeeping service go over the books. They should be reviewed before you place the business for sale, and appropriate adjustments made. Expect a potential Buyer to want the most recent financials, as well as business tax returns. As the deal progresses, it is likely that requests for updated financials will be forthcoming as well. Nothing says unprofessional like a business bookkeeping mess.

2. If you rent, review your lease. You may be required to notify your landlord if you intend to sell your company. Read through the fine print and make certain that an  uncooperative landlord won’t kill your deal to sell. If you own your building, get a fair market estimate of value from a licensed realtor if it’s your intent to sell your real estate along with the business. Unrealistic valuations on real estate are an immediate deal killer and ensure the banks won’t lend to the potential Buyer who may be seeking a loan for the purchase of your business and building.

3. Identify the perks, trips, entertainment, etc. that you charge the business as an owner. Disclose those straightforwardly to your business broker so that they can properly identify these “add backs” and adjust your income stream for valuing your business and attracting Buyers.

4. Keep your accounts receivables up to date. Having seriously delinquent overdue receivables is a red flag to potential buyers and reduces your bottom line. Remember, a good customer is one who pays on a timely basis, not the one that buys and buys and continues to owe you money. Too many old, uncollected, invoices on a/r’s is a major turnoff to potential Buyers
 

5. Give some thought to how you would help new owners survive and thrive in their transition to taking over your business. Identify the period of time you be willing to be available in person to help the new owners for the transition, and consider a reasonable support via telephone for certain amount of time thereafter. Remember, no matter how well you know your business, a potential Buyer may find it daunting to take over your business if they feel that the switchover support will be less than adequate.

6. Review your insurance policies with your licensed insurance agent. Make certain you have adequate coverage for your equipment, inventory, building, employees, liability, work comp, etc. An improperly insured business not only poses a potential threat to the existing owner, but may raise substantial concerns to a prospective Buyer who may be reviewing the same.

7. Also review any health insurance policies, pensions, and other benefits etc. that will be assumed by the new owner. These can sometimes contain “poison pills” that will be a turnoff to potential Buyers.