I am going to split this blog post into two posts. I feel these 12 steps if done, will increase the value of your company. And this is a good thing whether you are looking to sell the business or may be thinking about selling your business.
What did I miss? What do you agree with? What needs to be added? What should be taken off the list?
• Get your "house" in order - clean up your warehouse, clean up your office files, get things in order. Know where your files are stored. Know where your past customer files are etc. Basically, just get organized.
• Set a realistic time frame that you would like to sell your business. Do you need to sell it quickly? Do you have a couple years to work through the marketing and eventual sale of your business? The more time you give yourself the higher the value you may get for your business.
• Know your numbers. Be able to print off reports like an income statement. Know your gross margins. Know your marketing spend. Don't worry too much about a balance sheet as they really should not care how your are financed. In fact, letting them see your balance sheet might hurt your sales price. They may realize you really need to sell the business and negotiate more aggressively with you.
• Know your inventory. Do a physical count and make sure going forward you document all your inventory flows and out flows. Chances are they are going to buy your inventory so you best know what you have. Look to dump any old inventory as quickly as you can. Your potential buyer won't want any old inventory.
• Be prepared. Have your attorney and CPA already lined up ahead of time. At the very least have a few ideas lined up for professionals you can call with questions BEFORE you start any negotiations. Know any tax consequences to consider when structuring the deal. Can you be more flexible? That might allow for a higher price.
• Be patient. Your buyer is not going to move as fast as you want them to move. Build time into your closing date that you are working towards. Don't sign any long term leases and try to plan it so your lease goes into month to month status during the sale period. Your location may be of high interest to your buyer, they may want you to lock into a long term lease. Just be careful in case the deal does not close.