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1. Have a non-disclosure and confidentiality agreement ready for potential buyers to complete and sign, with a statement as to the amount of capital the buyer is prepared to invest.

2. Clean up their financial statements to minimize non-business expenses

3. Gather the information that buyers will want to see in a PDF, such as the last three years of corporate tax returns; financial statements – especially the most current YTD financial statement, business lease; list of all assets with values of over $500 – including model numbers and fair market value for each item with its approximate age; and a list of top 10 customers (without names) showing each one’s sales as a percentage of the total. Time kills transactions, so be prepared.

4. Understand that the only revenue that exists is what shown on a federal tax return.

5. Offer potential buyers a complete and comprehensive disclosure statement. Surprises that occur late in the process destroy credibility and kill transactions.

6. Resolve any tax or legal issues before going to market.

7. Talk with an SBA loan broker who deals with multiple banks before going to market. It is important to understand what potential buyers will need to have in the way of a cash injection, how much they can borrow, and the requirements for additional collateral, if available from the potential buyer, including using a home as additional collateral.

8. If real estate is involved in the transaction, prepare to be flexible. Most buyers would rather use their cash to buy more cash flow than make a passive investment in real estate that does not earn income.

9. When establishing the price of the business, allow some room for negotiation, but don’t set the price so high that you don’t get calls. Understand that a buyer is not going to pay for what once was or what could be. One of the main elements in the price of a business is last year’s results.

10. Partner with professionals. A professional intermediary can be worth his or her weight in gold.

If you would like a confidential, no-obligation analysis and discussion of what you can be doing now to prepare for when you are ready to put your business on the market, please call (888-893-6661) or e-mail ([email protected]). I serve customers nationwide. To learn more about my background and see customer recommendations, visit my LinkedIn profile at http://www.linkedin.com/in/dolansales or look around my website www.dolansales.com.

(c) 2013 Dolan Sales, Inc.