Thinking about selling your business? Get ready for a wave of inquiries from potential buyers. But fear not! Understanding what they’re looking for can give you a solid edge in the sales game.
Let’s take a stroll through the key areas where buyers will focus their scrutiny before sealing the deal.
**The Dance of Due Diligence**
Once you and the buyer sign that Letter of Intent, the due diligence waltz begins. The buyer, or their savvy representatives, will pore over your books, records, and operations with a fine-tooth comb.
Expect them to zoom in on that Profit and Loss Statement (P/L) like it’s the holy grail. They’re after a clear picture of your cash flow. They’ll tweak Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) to normalize any quirks, like one-time revenue or expenses.
Product, customer, geography—no stone will be left unturned as they dissect profitability. And they’ll keep an eagle eye out for any sneaky business, like charging operating expenses to depreciation, trying to artificially inflate EBITDA.
Your balance sheet won’t escape their scrutiny either. Changes in reserves could signal hidden costs that spell trouble for the P/L.
But hey, due diligence isn’t just for the buyer’s benefit. You, as the seller, need a game plan too. Lean on your Trusted Advisor to guide you through this maze. Clean up your act, understand your business’s true value, and manage expectations like a pro.
Remember, it’s not about what you want for the business—it’s about what you need.
**Bookkeeping Bliss**
Got your books in order? Are they crystal clear and easy to decipher? Buyers want to see clean, organized systems that tell a compelling story.
What about those pesky receivables? Are they collecting dust? And for confidentiality’s sake, code your customers as A, B, C until the final reveal. Then, and only then, will the big players step into the spotlight.
**Legal Limbo**
Are legal hounds nipping at your heels? Any lawsuits lurking in the shadows? Make sure your contracts are up-to-date and signed, your leases are squared away, and your licenses are in order.
Oh, and don’t forget to lock down those golden ideas with patents and trademarks.
**Leadership Light**
Buyers want to know the brains behind the operation. What’s your vision for the future? Are you irreplaceable, or is your team ready to carry the torch?
**And More…**
From products to customers to operations, buyers will leave no stone unturned. Be ready for a deep dive into every nook and cranny of your business.
So, gear up, polish your pitch, and get ready to dazzle those potential buyers. Your next adventure awaits!
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see Also : Fractional CFO Services in the New York City Area
See Also : Mastering the Art of Selling Your Business
