Metro Business Advisors
Checklist for Preparing to Sell Your Business
Please compile the items on this CHECKLIST to allow Metro to determine how best to help in your pursuit of your Life Beyond Business™
Three to five years of tax returns, balance sheets and P&L statements, or Schedule Cs if unincorporated
Having clean books that match your tax returns is imperative. The first thing a prospective buyer will look at after the confidential business overview is your financials. If our business brokers or M&A advisors can’t justify the asking price, a buyer won’t be convinced to pay what you want AND it will also be impossible for a buyer to get a loan.
Year-to-date profit and loss statements with a comparison to the same period last year, and a current balance sheet.
We can’t stress this enough: make sure you have a tidy profit and loss statement. Without these financials, your sale price will be impacted and you will also incur more expense getting your books into a format to accurately present the business for sale.
List of furniture, fixtures and equipment (FF&E) with estimated fair market value
What is the value of your Furniture, Fixture, and Equipment? Everyone understands that your assets depreciate, but we need a fair market value to incorporate in the sale price.
Estimated average dollar amount of inventory on hand at seller’s cost
Any inventory you have needs to be accounted for in the sale of the business. Clearly you will be using the supplies to continue to operate your business in the meantime; we need a realistic inventory based on a physical count to value for potential buyers.
Copy of lease (if applicable)
Our Business Brokers hold commercial real estate licenses to help buyers and sellers work through transitioning the lease of your space.
Copy of franchise agreement (if applicable)
Most franchisors have rules regarding listing a franchise for sale. Our business brokers will review and follow the rules of the specific franchise’s sale process.
Certificate of Good Standing from Secretary of State if selling the business
You will need to provide the new buyer a copy of the Certificate of Good Standing before you close on the sale, showing that you have paid your taxes and the business is in good standing.
A copy of any previous business and real estate appraisals
Typically Metro Business Advisors will complete a business valuation as the first step in our process. If you’ve previously had a valuation and appraisal of your current assets, please supply a copy.
Why are you selling your business?
One of the first questions a potential buyer of your business will ask is “Why are you selling your business?”
The most common reasons owners sell their businesses include:
- Partnership disputes
- Illness or death in the family
- Burn out
When you are considering selling, keep in mind that a potential buyer wants a business that is profitable. If your business is not currently profitable, selling your business in the open market is much more difficult. Metro’s advisory services may be able to help return your business to profitability.
Ways to make your business more appealing to prospective buyers:
- Increase profits
- Demonstrate consistent income figures
- Build a strong customer base
- Have major contracts that span several years