Preparing to Sell Your Business

At VR we are acutely aware of what it takes to sell a business. Preparing the seller and aiding the seller in preparing the business to achieve the maximum gain from the sale are two important roles of the professional intermediary.

Owners sell their businesses for reasons stemming from retirement, partnership disputes, personal relocation, family concerns, the desire for change, illness or to enter another business venture. By knowing the reason for the divestiture, your VR professional can better structure the most advantageous transaction.

VR turns to professional alliances to help you seek the appropriate tax strategy, succession plan, or investment strategy to again help you maximize the benefit of the sale.

Some key, specific items needed to ensure a successful transaction include:

• Having provable books and records to increase the number of potential buyers. Buyers want proof of sales and profits the business has attained in the past.
   
• Having a reasonable expectation of price and terms. Educated buyers only consider competitively priced businesses.
   
• A list of assets including furniture, fixtures, and equipment and a complete inventory that can be referenced during inspection reinforces what the buyer will be purchasing.
   
• An attractive lease. Knowing the terms of assignment or of a new lease moves the buyer closer to making an offer.
   
• Best possible appearance. Business premises that are neat, clean and in good repair gives the buyer confidence that the business is well run.
   
• A professional valuation of the business. It creates a document that proves value to the buyer and shows the business to be competitively priced.
   
• A covenant not to compete. Preparing the terms of non-competition within an appropriate distance and for a reasonable period of time gives the buyer assurances that you will not go into competition with them because you know all the customers.
   
• A specific reason for sale. This could include retirement, burnout, and simply a desire for change. Buyers will want to understand the reason for sale and be comfortable that there is no undisclosed information that could negatively affect their investment in the future.
   
• Time is of the essence. Be prepared to move forward when a qualified buyer shows interest in the business. The more time the buyer has to think about his/her decision, the more doubts he/she may have and the more opportunity others will have to advise against the purchase.
   
• No surprises. Most adverse situations, such as landlord problems, outstanding loans, tax arrears, unfavorable equipment leases and even non-compliance with zoning, health or other regulations can be overcome if known to your professional VR intermediary.