What Do I Need to Prepare to Sell My Business?
Selling your business is a complex process that involves several considerations. Let’s make sure you are prepared to sell your business.
The detail and information needed to sell your business varies depending on the buyer. Selling your business to a friend, employee, or wealthy individual will require much less information than a private equity firm or large corporation.
The checklist below covers what is expected from a private equity firm or a larger corporation.
- Business Diligence – company overview, product details, pricing, sales and marketing, market/industry overview and competition, growth opportunities
- Financial Diligence – historical financial statements (income statement, balance sheet, cash flow), projections, revenue and cost of goods sold details, general ledgers, trial balances, bank statements, inventory details, accounts receivable and accounts payable aging reports, EBITDA adjustments, employee census and payroll reports, accounting policies
- Legal Diligence – corporate structure and records, licenses, material agreements (customer contracts, lease agreements, employment agreements, etc.), equity and debt documentation, previous and current litigation/disputes
- Tax Diligence – tax returns, audit reports or correspondence with relevant government authorities, accountant work papers
- Environmental & Regulatory – assessments or compliance audits, environmental contamination issues, health & safety programs, permits, outstanding enforcement actions or pending violations, product registration and labeling, chemical and hazardous waste usage
- IT – servers, SANs, firewalls, routers, wireless access points, phone systems, power generators, cameras, end-user devices, software
- Benefits & Insurance – insurance policies (D&O/EPL, cyber, professional liability/E&O, auto, vision, dental, medical), carrier loss runs, 401K policies, paid time off
Selling your business is a time-consuming process. Trust me, you only want to go through it once successfully. Ensure you are fully prepared and confident that you have the proper documentation for the checklist items we covered.
If you are interested in learning more about selling your business, I cover other topics here in more detail:
