It’s Business, And It’s Personal

How to prepare a business for sale

On Behalf of | Feb 6, 2020 | Buying & Selling Businesses |

Business owners in North Carolina and throughout the country who want to sell their companies in the future could benefit from planning for that sale today. When buyers evaluate a company that they want to purchase, they want to see that the company is led by competent managers. Therefore, it can be a good idea to start helping employees transition to their future roles as leaders within the organization.

Those who want to sell their companies are encouraged to organize their financial data. A prospective buyer will want to see three to five years’ worth of sales figures and other financial statements. This helps them get a better idea of how much money the company makes today and can make years and decades after the sale is completed. While organizing the books, it is important to remove as many personal expenditures as possible.

Accounting software programs can help to create documents that are easy to read and understand. It is important to note that the owner’s salary and travel expenses are typically added back into any revenue figures that a buyer looks at. Other deductions taken for tax purposes may also be added back when calculating how much revenue a company makes. Finally, an owner will want to put any property that is excluded from the sale into his or her own name.

Typically, someone who wants to sell a business will do so with the help of an attorney. An attorney may help with the due diligence process or take other steps to facilitate the timely sale of an organization. Legal counsel may be able to review financial or other statements related to a business transaction to ensure that they are accurate. This may reduce the chances of a dispute occurring before or after the transaction closes.