Many businesses are built on the passion and hard work of the initial principals. These principals rarely consider the sale of the business during its inception. Nonetheless, whether due to health, burn out, unexpected success or death, the business owner’s road often ends with the sale of the business.
The following are some critical steps that a business owner should take in order to prepare for and maximize the selling price of their business:
- Maintain accurate, detailed, and certified financial reporting that can be presented to a potential purchaser;
- Recast the financial statements of the company to show the actual profit potential of the business, not casting them to minimize taxes as is most commonly done;
- Review and solidify the company’s organizational documents, employment agreements, executive agreements and agreements with key vendors and customers;
- Develop the skills and relationships of the company’s management and key personnel with suppliers and customers to avoid the goodwill of the company being tied solely to the owner(s); and
- Carefully hire a team of skilled professionals to advise on tax, liability and other issues that arise during the sales process.
If you have any questions about preparing for and/or selling your business, we encourage you to call or schedule an appointment to visit with us to learn how our team of multi-disciplined professionals can assist you with maximizing the sales price, minimizing taxes and avoiding common pitfalls in the business sales process.
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