Prerequisites to Selling a Company
Updated: Dec 7, 2020
1. The internal financials must be impeccable
A prospective buyer will always start with the financials and tax returns.
The financials must correlate to the tax returns.
Inventory must be properly accounted for (including “dead inventory”).
2. Ownership must be focused on cash flow, profitability, and growth.
A slow or no-growth financial history will suppress the selling price.
3. The market value of equipment must be known (vs. depreciated value).
Buyer’s want to know the actual market value of equipment.
Use an equipment appraiser if necessary.
4. Dependencies should be minimized.
5. Management staff must be ideal for a new owner.
Buyers want to inherit a team that thinks and make good business decisions.
6. Facility must be clean and organized.
First impressions are important.
Cleanliness must be a company norm.