To sell business, it is important that you get all the necessary information for buyers to review. It is how prepared you are that determines whether you will sell at a profit or at a loss. Though selling a business on your own is a good thing, it is not recommended especially where you are doing so for the first time. To sell business, you need to work with business brokers, lawyers as well as business valuation experts. Today, a good business broker San Diego will help find the right professionals to work with. In this article, however, we will look at some of the documents you need to get ready for showing to potential buyers.

Financial information

Most private businesses are run in a way to minimize tax liabilities. The downside is the same operating technique can bring down the value of a business. Though it is possible to reconstruct the required financial statements, the process may force you to pay back the income taxes as well as penalties. With that said, if you have always wanted to sell business at a certain time, you need to make the necessary accounting changes in advance. Prepare financial statements as well as other necessary documents the buyers will want to review. You should include:

  • A complete balance sheet
  • Income statement
  • Valuation report

Legal information

The key reason why in addition to working with business brokers you should hire an attorney is because of the legal issues pertaining to the firm. To sell business, you will need basic business operating documents like:

  • Articles of incorporation
  • Bylaws
  • Supplier agreements
  • Partnership agreements
  • Franchise agreements to data on the regulatory requirements
  • Documents on all pending legal actions
  • Lease terms
  • Stock status

Marketing information

Considering you will sell business to intelligent buyers, you will need to get marketing information ready for them to review. This information will include:

  • Marketing expenditures
  • Business’ chief market area
  • Market share
  • Product line information

Intelligent buyers will want to know if your products are proprietary or potentially valuable new products in the market. Buyers will also want to see descriptions of customer demographics, pricing strategies and competition.

Operations information

Another important piece of information you will need to provide is that on the various aspects of your daily operations. This ranges from company policies to personnel listings to historic hours of operation. You should include:

  • Organizational charts
  • Job descriptions
  • Employee benefits
  • Pay rates
  • Presence or absence of employee unions

Once you have set all the details and documents, you need to organize them in a comprehensive presentation package. These are the details that will influence how much you sell business. A complete presentation package should include:

  • Business history
  • Description of the business operations
  • Description of the physical facilities
  • Discussion of the suppliers and agreements
  • Review of the historical and current marketing practices
  • A description of the competition
  • Coverage of employee and personnel issues
  • Owners identification
  • Description of the business’ insurance coverage
  • Description of current and pending legal issues or any contingent liabilities
  • Financial statements for the last 3 to 5 years

The presentation package is necessary if you want to sell business at the right price and to the right people. To avoid guesswork, work with a business broker San Diego every step of the way.