Metro Business Advisors
Preparing You To Sell Your Business
Please compile the items on this CHECKLIST to allow us to assess 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
- It is imperative to have clean books that match your tax returns. 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 sale price, it will be hard to convince a buyer to pay what you want AND it will also be impossible for a buyer to get a loan.
- Year-to-date profit and loss statement with a comparison to 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 on hand needs to be accounted for in the sale of the business. Clearly you will be using the supplies to continue to operate your business; 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 the new buyer and seller work through the current lease of your space.
- Copy of franchise agreement (if applicable)
- Most franchisors have rules regarding listing a franchise up sale. Our advisors or business brokers need to review and follow the rules of the franchise 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 business, showing that you have paid your taxes and are in good standing.
- A copy of any business and real estate appraisals available (if selling the business).
- If Metro Business Advisors doesn't complete a business valuation for your business, we need a copy of the valuation and appraisal of your current assets.
Why Are You Selling Your Business?
The number one question a potential buyer of your business will ask is "Why are you selling your business?"
The most common reasons business owners sell their businesses:
- Partnership disputes
- Illness or death in the family
- Burn out
Something to keep in mind when you are thinking about selling is that a potential buyer will want a business that is currently profitable. If your business is not currently profitable, selling your business in the open market is much more difficult.
Ways to make your business more appealing to prospective buyers:
- Increasing profits
- Consistent income figures
- A strong customer base
- Major contracts that span several years