Preparing for the Sale of your Company

(a thirty thousand foot view)

If you are ready to sell your business, it is crucial to be prepared, regardless of your motivation. There should be a structure for things to go as smoothly as possible.

The seller should have a team for this purpose:

• Intermediary

• CPA

• Legal Counsel

At the same time, the seller should have a plan of action that requires homework for things to go along smoothly.

For example:

• Financial Goals of the transaction

• Action plan with a time table

• Have a valuation done on the business

• Target the best possible buyers

• Outline for a Confidential Business Review (Offering Memorandum)

• Prepare corporate docs such as corporate minutes

• Prepare to deal with prospective buyers

• Evaluate proposed terms

• Have a definite "To Do" list

• Looking closely for key buyers such as customers, employees etc.

Basically this is getting your house in order. Remember once the process starts all questions are fair. The buyer will have to analyze all the financial records and perform due diligence, so being organized is crucial.

Common mistakes include being impatient, indecisive, loose ends, using family members for this process, and being unrealistic about the risks and weaknesses of your company. This is a strong point as a lot of sellers have great expectations of price based on comments they hear about on Wall Street.

Having a solid understanding of the seller's objective and personal needs are vital as well.

In essence, the seller will benefit in every way by having everything in the business organized.