Lamarwaltersuccess Blog

April 26, 2012

“Selling Your Business? Get Your Documents in Order”

Filed under: Business, Inspirational, Motivational, Sucessful, Uncategorized — lamarwalter @ 11:58 pm

By: Mike Handelsman

Prospective business buyers wont’ simply take you on your word. You need to have documents ready to support every claim you make during the sales process.

During the course of a business sale, sooner or later your prospective buyer will expect – or, put more accurately, the buyer will demand – to see “just the facts” about your business. Therefore, you will need to have all your documents completed and organized before the business ever hits the market.

The following checklist will help you assemble the documentation you need to be ready to share.

Step 1. Be aware of the documents you’ll need to present during the sale process.

You may already have many of these documents complete and available, in which case you can check it off following chart’s document description. Otherwise, leave it unchecked and plan to work with professional sale team members (business broker, attorney, accountant and/or other intermediaries) so you’ll be prepared when the documentation is needed.


Non-Disclosure Confidentiality Agreement

Personal Financial Statement Form for Buyer to Complete

Offer-to-Purchase Agreement

Note for Seller Financing

Financial Statements for the Current and Past 2-3 Years

Statement of Seller’s Discretionary Earnings or Cash Flow

Financial Ratios and Trends

Accounts Payable and Accounts Receivables Aging Reports

Inventory List with Value Detail

List of Fixtures, Furnishings and Equipment with Value Detail

Asset Depreciation Schedule from Tax Return

Supplier and Distributor Contracts

Client List and Major Client Contracts

Staffing List with Hire Dates and Salaries; Employment Agreements

Organization Chart

Photos of Business

List of Opportunities for Improvement with Revenue/Profit Projections for Each

Business Formation Documents

Corporate or Schedule C Tax Returns for Past 2-3 Years

Building or Office Lease

Equipment Leases and Maintenance Agreements

Business Licenses, Certifications and Registrations

Professional Certificates

Insurance Policies

Copies Proving Ownership of Patents, Trademarks and Other Intellectual Property

Outstanding Loan Agreements

Description of Liens

Product/Service Descriptions and Price Lists

Business Plan

Marketing Plan and Samples of Marketing Materials

Employment Policy Manual

Business Procedures Manual

Other Documents Unique to Your Business

Step 2. Assemble all documents so you’re ready when the need arises – and it will!

The business description that you provide in early ads and communications will draw initial buyer interest, and your early personal assurances and explanations will inspire further interest. But it’s highly unlikely that you’ll receive any kind of interest commitment, let alone an offer or indication of purchase intention, until you turn over hard-copy versions explaining provable facts, figures, and financial statements for your business.

Begin immediately to assemble all the documentation you’ll need over the time period in front of you.

In next week’s installment of “Selling Your Small Business” we’ll help choose the experts that will make up your sales team.


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