It’s Business, And It’s Personal

Important steps to take before selling a business

| Dec 26, 2019 | Buying & Selling Businesses |

If a business owner is interested in selling their company in North Carolina, they should prepare and come up with a well-orchestrated plan. They want the highest return on their capital, energy and time.

Many business owners have an idea of what their company is worth and how it stacks up against competitors. However, having a qualified valuation professional evaluate the company and its competitive environment is generally worth the expense. The review will usually include looking at all assets and outstanding debts. This could identify opportunities to help improve the cash flow of the business.

It is important to address issues that could potentially dissuade buyers. This may include updating licenses, contracts with vendors and permits. It could also include performing renovations or repairs on the building and documenting training and operational processes. When the third-party evaluation is performed, it will likely expose some issues that should be fixed before the company is put on the market.

To execute an efficient and timely sale of the business, full financial transparency is essential. Before putting a business on the market, it is important to have all financial records available to potential buyers. This includes tax returns that go back at least three years, profit and loss statements, copies of leases and monthly bank statements.

In most cases, a confidentiality agreement is beneficial. All buyers and those who are involved in the sale process could sign this agreement to keep information about the business and its finances confidential. A lawyer may help an individual who is selling their business to draw up a nondisclosure or confidentiality agreement. Ultimately, legal counsel will aim to protect the client’s business assets and make sure all the transactions are legal.

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