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Business For Sales - How to Prepare Your Business for Sales?

buyer statements value help

After you have decided to sell off your business, it is necessary to prepare it your business for sales. There are several crucial things that must be fixed before selling in order to make it a rewarding deal. Below mentioned are a few easy steps on how to do it and get your business ready for sales.

1. The very first step of preparing your business for sales is to demonstrate improved business performance. You should build your business in such a way that the sales and profit record is shown strong during last 12 months. Your sales revenue for every month should either be matching or outperforming the previous one.

2. The potential buyer would like to see your books and financial statements. Always keep your book work up to date and timely prepare your profit and loss statements, balance sheet, etc. This is a general rule for both small and large companies as it reflects your level of professionalism. If you are the business owner, it is essential to refresh your memory with all critical points. It is useful because when the potential buyer asks any questions, you can answer them without any problems. Auditing of statements from a Chartered Accountant is also useful as it boosts the buyer’s confidence and reduces risk. Keep your other relevant documents ready such as outstanding loans, mortgage and other legal documents.

3. Next step in preparing your business for sales is to keep track of all sales and payments. Immediately record all transactions whether you have made or received a payment in cash or cheque. Most of the businessmen forget to add cash transactions in their records, which is extremely important. Each and every transaction makes an impact on your company’s financial statements, so do not forget to add it. In case you have not recorded it, make sure that you explain the same to the buyer.

4. Keep all your plant machinery and equipment up to date. Nobody would like to purchase a business with depreciated or obsolete equipments. If you want to get an excellent value for your business for sales, either replace or repair that equipment. Also, dispose of the unusable inventory lying in the plant.

5. Seek help of a professional accountant for proper evaluation of your business. It is extremely important to determine a realistic and valuable price for your business for sales. Buyers usually under evaluate the business, while business owners over estimate it. It is a better idea to take assistance of your accountant to carry out a comprehensive analysis and calculate its optimal value. The valuation of a company is not done only by profit and loss statement or balance sheet. Other factors that affect the value include goodwill, location, age and condition. Do not forget to keep a buffer of 10% on business value. There are dual benefits of doing this. Firstly, it will give the buyer a room for negotiation and secondly it will help you achieve the desired selling price.

6. After you have done it all, it is necessary to advertise your business for sales properly. There are several advertising ways such as newspapers, business magazines and classified ads. You can also advertising your business on specialized “business for sales” websites. These websites receive massive traffic from people all over the world, and you can take their advantage for your business for sales. Your advertising campaign should be impressive and produce a large number of quality leads. You can choose only the standardized leads from that large pool and carry out a credit check. If your business house has ample space, you can advertise it there only and give information about your business for sales.

Selling your business is not an easy task and requires meticulously taken decisions. Apart from the owner, there are several other people in the business that get affected by your business for sales. Hence, before putting it on sale, make sure that you conduct a thorough analysis with the help of professionals. Once your find a suitable buyer for the business, give him or her some time to show how you operate the business and arrange an induction session with the existing employees.

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