5 ways an advisor can help you get the most out of a business sale

By Emma Peterson.

Whether you are looking to sell soon, or in the future, here are some tips to help you make sure you’re prepared.  

For any business owner, there comes a moment where you have to decide what’s next for your company. There are many routes, from handing it off to a trusted employee or merging it with another company, but most options involve selling some or all of your company. This can be a difficult decision. Not only have you put years of hard work into your business, the process can also be complicated.  

Between pitfalls like not having your financials in clear order to complications like buyers backing out, business owners looking to sell can lose thousands of dollars if not properly prepared for the sales process. On the other hand, there is huge potential for financial benefits when sales are done correctly. This is why teams like Maven Group’s are there to help business owners navigate the entire sales process. Keep reading to learn about five different ways they can help you maximize your profit and ensure a smooth transition.

1 – Valuation

It can be hard to understand and determine the true market value of your business, which is why it can be helpful to hire a professional to give their perspective and opinions. People like the team at Maven Group can perform business valuations based on a comprehensive examination of your company and their expert knowledge of the industry trends among the various buyers and comparable transactions in the past. This can help you establish realistic expectations and competitive pricing.

2 – Financials  

Selling is probably one of the biggest financial undertakings you can make with a business, so it’s important to make sure all your financials are in order and transparent. It’s important to compile accurate, up-to-date financial statements that catalogue your business’s profits and loss statements, balance sheets and tax returns. Aim for including the past three to five years of these documents in order to establish a clear and wholistic perspective on your financials.

In the vein of financial preparations, it’s important to work with a tax advisor to make sure you have a full understanding of the tax liabilities and ramifications of the sale. They will be able to help you optimize the outcome by considering things like asset versus stock sales and installment plans.

3 – Legals

Collecting your financial documents is just the start. Selling a business comes with a complex legal process so it’s important that you are prepared properly. First, make sure everything is in order internally. This means ensuring that all licenses and certifications are up to date and there are no pending disputes/issues. Secondly, organize all the information you do have. Be ready to present documents such as business licenses, contracts, leases, agreements with suppliers and so forth to a buyer.

4 – Operations

The sales process can be a very turbulent time for your company, so it’s important to make sure your operations are running smoothly. This is a great opportunity to review systems and processes to make sure things are streamlined and efficient. Not only does this strengthen the business, it also helps present a strong, sustainable business image to potential buyers, raising the value of your business.  

A great way to organize this information for potential buyers is through a confidential information memorandum (CIM). This is a document that outlines your business’s background, financials, operational knowledge, market position, key employees, customer base/relationships, growth potential and any other critical information.

5 – Negotiating

In addition to bringing in professionals to help you with the preparations for the sale, it can also be a good idea to involve them in the sale itself. One way they can help out a lot is through negotiation. This is a great way to ensure the final sale contract has favorable terms for you and covers all key aspects (like purchase price, payment terms, warranties, etc.).

Get guidance and consulting that will help your profitability and value in the marketplace today. You can start with a free valuation from Maven Group online.