Tips For Selling Your Business – #2

#2. Make sure you have good financial records. When a prospective buyer looks at your business, the buyer is going to take some amount of time for due diligence. Nothing turns a buyer off more than financial records that don’t make sense. For example, if your Quickbooks P&L doesn’t match your tax returns, the buyer will automatically distrust all of the numbers. Another problem that makes income hard to figure is if you have unreported income. You and your business broker are going to have a difficult time convincing the buyer that everything is as you say.

Have a good accountant, whether it is in-house or an outside firm. Revenue and expense line items that are labeled the same from year to year allows a buyer to look at past expenses where there is some continuity. If one years expense on a certain line looks way off, have a good, documented explanation for it.

Your accountant can help you with a clear presentation of your companys past performance. A buyer will be impressed rather than suspicious and turned off. The objective is to sell your business, by presenting the business to a prospective buyer where the only conclusion they can make is that your company is being professionally run by a competenent owner, you.