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6 Critical Steps to Prepare a Business for Sale

Selling a business in a city like Las Vegas is a complex venture, not for the faint of heart. There are factors to consider, such as; current market conditions, the value of the company, and the buyer's needs. With so much to understand, the process can be simplified with specific steps recommended by professionals in this domain. Here we give you six steps to follow while preparing your business for sale.


1) Identifying Goals and Objectives

Set your sales goals and objectives upfront to ensure that a business's sale is executed efficiently and effectively. By doing so, you will identify the type of buyer needed and tailor the deal to meet those specific needs.

Defining goals and objectives includes understanding your motivations to sell, your anticipated timeline, and the desired outcome of the sale. Once these factors are clearly stated, the next step is to develop a sales strategy to achieve them. Including an updated audit of your business, its financials, drawbacks, and market position is helpful.

2) Valuation

Before selling a business, the owner and seller want to clearly understand its value. After all, this is the central document in negotiations. Valuation will ensure that you sell your business for a fair price and maximize your return on investment.

Valuation determines three aspects of the sale:
● The fair market value of your business 
● The price a willing buyer would pay for the business 
● The price you accept

A professional valuation will consider a few factors, such as the company's financial performance, market trends, and the business's unique attributes. When detailed in an attractive presentation, this information provides a realistic assessment of what your business is worth in Las Vegas and helps you negotiate a fair sale price.

3) Preparing Documents

Having your ducks in a row ensures a smooth sales process and helps avoid any potential problems. Many deals have gone south at the eleventh hour due to missing papers or discrepancies between figures.

A well-documented proposal gives buyers peace of mind of knowing they are getting the information they need to make an informed decision. It can also speed up the closing process so that both parties can move on to the next stage.

Documents the buyer may ask for in the due diligence phase might include: 

● Your business plan 
● List of all assets (including any real estate, inventory, equipment, and intellectual property) 
● List of liabilities (including any debts owed to suppliers, creditors, or the government)  
● Current profit and loss statement
● A balance sheet
● Tax returns for the past few years
● Contracts with suppliers, customers, employees, and any office or retail space leases.
● If the real estate is owned, that will involve negotiating for purchase or the owner entering a lease agreement with the buyer.

4) Review Documents 

You can avoid awkward, embarrassing situations with an audit of all documents related to the company before listing it for sale. Doing so will uncover risks or liabilities that could lead to problems. By catching issues early on, you can address them and make the necessary corrections to achieve a smooth process and closing transactions.

5) Improving Your Business Value

Improving your business will attract a well-qualified buyer who recognizes the value and is willing and able to pay fairly. Taking the time to scrutinize and document the value of the various aspects of your business will allow you to demonstrate to buyers all tangible and intangible assets. 

To improve your business value, you can increase its efficiency and productivity. You can implement newer technologies and introduce processes that streamline operations. You can also work on reducing any outstanding debt or liabilities. Attractive values to a prospective buyer include a large customer base, healthy financial reserves, and a solid management team. 

6) Hiring a Team

Plan for a team approach composed of experts in business sales who will work together throughout the entire process. Each professional provides advice and financial and legal transactions. 

First Choice Business Brokers stays with you from your first consultation through negotiations, the sale, and a successful transition to the new owner. Your advisor coordinates the process, and accountants, lawyers, bankers, real estate agents, and insurance brokers collaborate to provide documentation and legal transactions that complete the sale. 

It’s true what they say, “Team Work Makes the Dream Work”