Businss buyers are inclined to view businesses for sale seriously where the following applies:
- The seller is serious and has a fundamentally sound reason for selling. Be prepared to disclose and discuss.
- The business is backed up by certified financial statements for the past year and preferably for three years
- The required skills, experience and knowledge is not entirely embedded in the owner. Start transferring the knowledge to a trusted key person, if possible
- The accounting records are available, easily accessible and well maintained
- The lease agreement/s has been pre-cleared with landlords for passing on to the next owner.
- The seller is prepared for disclosing sensitive information to pre-qualified buyers.
- The seller has used professional advisors to provide an independent valuation of the business to substantiate the asking price.
- The asset registers, client files, supplier detail, tenders, contracts, payroll, terms and conditions of employment are in order and accessible
- Like selling any property, make sure that it has been painted, cleaned and generally fixed up and pleasant to look at
With all of these critical areas to consider, the seller would have to embark on a structured project to get these items in order, if they are not. The time spent on this will be dependent on the size of the business, the industry and the amount of money available to prepare the business for sale.
Sellers must keep in mind that 'buyers are king'
Sellers must keep in mind that buyers are king and they have choices to make. Give your business the best chance by being prepared and ready for when the buyer walks in the front door.
First impressions are lasting impressions and can hardly ever be explained away. Buyers can hardly be expected to wait for items like updated financials etc.
The bottom line therefore in terms of how far in advance should you be preparing your business for sale is therefore -always treat your business like you are going to sell it, keep the administrative processes up to date, and if not, make the effort to get it ready for sale, preferably before putting it on the open market.
Business brokers and advisors can often be approached to give the business a trial run (test the readiness), and go to market knowing that it will pass the key areas, which shall probably be required anyway for a due diligence.
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