Comprehensive Checklist for Selling Your Business

Entrepreneurs are loaded with responsibilities that make them forget about a few vital steps while preparing their business for sale. It requires a lot of work to make the entity appear enticing and commercially viable to buyers. The time-consuming and challenging task can leave the owner with very less time to focus on other preparations.

Thus, you must have a checklist when you intend to sell business online for the best price. The all-inclusive list is beneficial in preparing for the sale time and closing the deal without any challenges. The list helps in organising things and getting the paperwork ready to get the highest possible price for the venture. So, here is a comprehensive checklist for selling your business.

1. Prepare Your Business Documents

The first thing to get ready among your business documents is the customer database with details of all the loyal and satisfied buyers. Offering contact details of an existing customer base is significantly vital for upselling, repeat orders and cross-selling by the new owner. Other important documents include long-term contracts with suppliers and vendors and the business plan.

Bills of equipment and fixtures bought for the business and their maintenance records. Also, add the operations manual to the file which includes the policies, procedures and framework for running the venture. Do not forget about the website domain name, insurance, licenses, permits, intellectual property and other business information. Also, you will have to provide the new owner with an asset list with their actual worth.

2. Fix the Problem Areas

While you are working on reducing costs and increasing profits to make the business more productive, it is essential to get rid of the problems too. These can make the potential buyers take a back step if they are too apparent. Thus, get the building restored and make the interiors look good if they have aged and need maintenance.

Resolve any disputes with customers or employees with the help of your lawyer and accountant to present cohesive and congenial work culture. If there are any pending legal issues, get them sorted at the earliest. Also, get ready to transfer the lease contract and speak to the landlord about the sale. Make sure that you leave no gaps and the business is ready for the transition on papers before the actual event.

3. Get Your Financials in Order

Finances are of utmost significance as they are the first thing noticed by potential buyers. Make sure that you have all the records in place for the previous years and the financial reports for assessment. These are required to determine the performance of the business and predict its profitability in the future.

If there are any losses or dry spells, you need to honestly put them forth to avoid any disputes later. Do not forget to organise your tax documents, including GST, payroll, income tax, CGT, etc. Besides these, you must keep your bank statements, loan documents and business account details ready for transfer to the new owner after the purchase agreement is signed.

4. Listing Your Business

Listing the business online is a simple process, and you can easily do it on your own. Make sure that you add all the important features to make it more attractive and get the business evaluated by the accountant to set a price that leaves room for negotiations. Start shortlisting qualified buyers as you get enquiries.

Determine your role after the sale and have your exit plan in place so that you do not feel lost. Check the financial capability of the shortlisted buyers and make them sign the non-disclosure agreement for due diligence.

5. Inform Relevant People

A lot of people are connected with the business internally and externally and they need to be informed about the transition. However, you do not have to tell everyone upfront as it can lead to resignations, uncertainty and panic. Confide in people who need to know about the initiation of the sales process, such as your close aides in the team, your accountant, lawyer, supplier, etc.

You need to talk to your employees when negotiations have completed and you are heading towards the transition. It will not allow them to feel annoyed or restless as they will have a new owner standing right in front of them with the support of the outgoing owner.

6. Transferring Outstanding Projects

Every business has several projects that are in progress and in the pipeline. The owner must make arrangements to transfer the work to the new owner and help in the handover. They also need to inform the clients about the change in management and get them acquainted with the new CEO.

If any client decides to roll back the project because of the change in the management, the loss incurred by it must be paid, and the dues need to be settled so that the new leadership cannot raise any red flags.

7. Preparing the Purchase Agreement

Ask your lawyer to create a purchase agreement that must be signed by all the parties. If you wish to stay connected with the company as an advisor or stakeholder, make sure to add these clauses in the contract and inform the buyer upfront.

Help the new buyer get comfortable with the processes and the team before saying your final goodbye. Ask the accountant to clear your dues related to salary and accept your payment upfront instead of instalments from the buyer.

Conclusion

Entrepreneurs with the intention of selling business online need to follow the checklist provided above. The comprehensive list covers everything that you need to get organised before the final handover.