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Prerequisites to Selling a Company

Updated: Dec 8, 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.

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