When preparing your business for sale, keep the following in mind:
- Selling your business is risky, so start the preparations at least one year in advance. You have to tie up all loose ends, make proper inventory of assets before you sell.
- Go through audits and financial statements to chart growth. Ensure the financial records are up to date.
- Formalize records and document all business dealings for the convenience of buyers. This will also help avoid confusion when the new management takes over.
- Don’t keep any pending accounts of a customer open; tie up all loose ends before handing over the company.
- Take care of the contract details with suppliers and franchisees. This will eliminate problems for the new management.
- Get a proper handbook of company rules and guidelines printed. Unwritten rules are hard to follow.
- Review leases and real estate deals. You do not want the location to affect the sale of your business. If the location can be a hindrance to sale, then consider moving to a better location before selling.
- Take care of the equipment leases and return equipment once lease period is over.
- Make an inventory of all the company assets, moveable as well as immoveable.
- Upgrade and modernize software and computer systems. The best software should be installed before you make a sale.
- Sell real estate separate from other company assets. Real estate attached to other assets makes the company unwieldy when its time to sell.
- Ensure that employees’ interests are taken care of. Try to retain the good employees during the merger process. If you have to cut down on the number of employees, ensure they still have goodwill for the company.
- Have an expert negotiator by your side well before you start negotiating a deal with the other party.
By taking care of your employees’ interests, and looking out for the new management when selling the business, you will earn a lot of goodwill. You should also put your records in order before selling. By following the guidelines given above, you will be able to avoid the pitfalls of bad business deals.