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Business Selling Tips

Selling your business is not the easiest thing to do when you don't have records. Many business owners try to sell their businesses without proper financial statements. Most feel that the buyer gets a good profitable business and should just spend a week or two in the business to realize what a bargain it is.Advice to you for selling your business - get your books in order.

The following records are required by financial institutions for lending money to the prospective buyer of a business:

  • Audited financial statements (up to three years)
  • Tax returns of the business
  • Bank statements of the owner or business for at least the past 6 months
  • Business plan and projections for the next year to three years
  • Copy of the latest lease agreement

Even if you think you just want a cash buyer, you still need to have proof of your income and business history. Apart from the above documents you also need to get the following in order for the selling process:

  • List of creditors
  • List of debtors
  • List of clients
  • List of suppliers
  • Inventory or stock list
  • List of all machinery and equipment with their purchase receipts where possible and their full descriptions
  • List of fixtures and fittings
  • List of repairs and enhancements to the property
  • Contact details of your bookkeeper and bank account manager
  • List of your employees, their positions, salaries and benefits
  • Income and expenditure reports
  • List of items that are excluded from a sale
  • List of immediate competitors
  • Description of current marketing strategies.

If you don't have the above documents ready, you should start today. The purchaser cannot make an informed decision and you cannot provide an appraisal of the value of your business without the above records. It is hard work, but once you have all of the above in place, you are ready to sell your business at a good market related price.

Author: Isebell Gauche

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