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How to prepare your business for the sale - view tip
You can maximize your business value by having a viable marketing strategy in-place - view tip
Important guide prior to announcing that your business is for sale - view tip
To whom to sell your business - view tip
#5 Timing Your Business Sale - view tip
#6 What is Your Company Worth? - view tip
#7 Cash Determines Price - view tip
#8 Listed 3-out-of-4 Businesses Do Not Sell - view tip

Sales Tip #1

How to prepare your business for the sale

First, Get Your Financial Records in Order

Your sales presentation to a prospective buyer will include the company financial statements for the past 3 years. Therefore, you should always prep your business to show a 2 or more years up-trend that supports your market value. This includes:

  • increasing sales from the prior year
  • incurring expenses that directly grow the business
  • building a positive cash-flow stream

Additionally, you should:

  • get rid of excess inventory
  • pay off short and long-term obligations
  • show a history of collectible receivables
  • maintain a strong credit record with your lender
  • ensure your G/L accounts are classified correctly
  • resolve any complaints with business bureaus or other
Build Up Your Net Cash Position

Cash is King in any buy-sell relationship. Your financial records need to reflect the cash position of the business using standard accounting practices. But more importantly, you need to have a positive net cash position that support the asking price of your business.

Increasing the net cash position include the following:

  • sales need to be trending up
  • expenses need to be tightly controlled
  • you should show collectible receivables
  • inventory levels should be highly managed
Have a Defined Market and E-Commerce Strategy in Play

You need to But you need smart marketing that shows direct and e-commerce sales. Businesses with marketing plans in play allow a new owner to step in and capitalize on your established channels. That increases your value.

Carve Yourself Out of the Picture

The hardest business to sell is where the owner is the "goodwill" of the company. This becomes the biggest fear of buyers - once you leave, the business relationships dry up.

Revamping your operations to move you out of the day-to-day is a high value proposition for buyers. You are not removing yourself from the business, but lessening your role in the factors that make-up the goodwill value of the company.

  • The less your business is dependent on key labor, the more valuable the business.
  • The ideal business is when the buyer can take over a turn-key operation. The objective is to automate procedures and operations so that a system can be replicated and implemented by any person.
Deliver Exceptional Value
  • As you prepare your business to sell, continue to deliver exceptional value to your customers.

We have more information on preparing for the sale

Contact us

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Krayton M Davis
Executive Director, Novars Group, Inc

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