Strategically preparing your business for sale can dramatically improve its value and make it more attractive to potential buyers. Set yourself up for success by asking critical questions about your business and the steps you can take to prepare it for sale and maximize its value.
Our business lawyers can help by preparing a business-for-sale checklist, representing you in negotiations for the purchase and sale of your business, providing advice about financial and tax implications, and finalizing the documents to complete the transaction.
Preparing a Business-for-Sale Checklist
For many entrepreneurs, their business is their most valuable personal asset. They have spent decades building the company, and the prospect of selling may feel overwhelming.
Successfully selling a business and maximizing its value requires extensive planning and preparation. You will need assistance from various professionals to accurately value the business and facilitate the transaction. But the time spent preparing your business for sale will pay dividends by making it more attractive to potential buyers and increasing the sale price.
Meet with your CPA and Financial Advisors
The sale of your business is a critical inflection point for you personally, and for the company you have spent years building. Before selling, meet with your lawyer, your CPA, and your financial advisor so you fully understand the retirement and tax implications of the sale. This will allow you to better understand the impact of the sale and make sound decisions about the process.
Streamline Operations
To prepare your business for sale and give you leverage to demand a higher price, take steps to make your business more profitable. Eliminate redundant or unnecessary expenses, negotiate contracts to lock in discounts, and eliminate experimental marketing. You should also avoid launching a new product, service, or significant initiative, and work to increase revenue.
Think Like a Prospective Buyer
Help a prospective buyer understand your business and its unique value proposition. Creating a brand overview that identifies and explains your business, what it does, and how it generates cash flow. Identify what makes your business stand out and explain your vision for its future.
Prepare Financial Documents for Buyer’s Due Diligence
Put your business and accounting records in order. This will make it easier for prospective buyers to evaluate your company. A buyer needs a clear picture of the financial condition of the business and will need to integrate your accounting methods into their systems. To make the business appealing to potential buyers and ease this transition, you should have a well-defined accounting process to post transactions and generate financial statements. This process should be consistent with industry standards.
Identify and Qualify Prospective Buyers
Consider industry peers, competitors, customers, or suppliers. These are people who know your business well and may see it as an attractive investment.
When you identify prospective buyers, attempt to determine if they have pre-qualified financing for the purchase.
Be prepared to explain why you are selling, who your customers are, the accessible market for your services, and future trends and business opportunities.
Meet with RKPT to Prepare and Review Legal Documents
RKPT can help negotiate the sale of the business and prepare the documents needed to facilitate the transaction. We will review employment and supplier contracts and prepare the sale declaration, purchase agreement, and confidentiality agreement to facilitate the sale.
Prepare to Transition to the New Owner
As the sale nears completion, you will need to prepare to transfer ownership of the business. Take an equipment inventory, decide whether employee contracts will be transferred to the new owner as part of the sale, and transfer merchant accounts and account credentials.
RKPT: Legal Representation for All Your Business Needs
The business and personal planning lawyers at RKPT are here to help your business succeed. When the time comes to sell, we will help maximize your financial return.
Based in Cincinnati, we represent businesses throughout Ohio and across the country.
Call us at (513) 721-3330 or contact us online to learn how RKPT can help and to schedule a confidential meeting with one of our attorneys to get the legal assistance you need.
