For both a business owner and prospective buyer, the attention to detail can make the transfer of business ownership easier to achieve.
For those that think this is obvious, think again. Most small business owners do one thing better than anything else, and it’s usually growing the focus of their business – either a product or service. Face it, if none of us had to keep records of anything, would we complain? Probably not. And with the pressures to stay ahead, make a profit, and beat the competition will always trump record keeping, right?
Well, many business owners AND buyers are surprised that when trying to determine whether a business is a good potential for acquisition by a buyer, that the details of how a company operates, and the ability of the business owner to tie the story of their success together in a complete package is not a simple task.
First, you can be assured that other people like accountants, financial planners, attorneys, insurance agents, lenders, and others will be involved – from both sides! Second, their desire for obvious and not-so-obvious information will be far more than you can estimate. They ask for this to poke holes in the story and bear out the true value and potential of the company.
As a Seller, understanding WHAT is going to be asked of you is important so you have time to plan. Prudent business owners seek the advice of professionals, like a certified business intermediary who understands all the aspects of what is needed to prepare for a future business sale. Dont wait, because this process should be implemented years in advance!
For a Buyer, the availability of accurate and complete information can make the decision to buy easier, and help justify a closer offer to value. That will help you get loans in order to close on the business, and give you a level of comfort.
Remember, preparing for a sale helps the owner AND the buyer, and likely will help justify a speedier transaction, and a price that is agreeable to both the seller and the buyer!