According to multiple sources, 80% of businesses fail to sell because the owners didn’t plan ahead. Waiting until the last minute or being forced to sell limits options and opportunities for a successful sale.
Key Financial Preparation Steps
- Year-End Financial Statements: Have an accountant prepare your most recent year-end financial statement along with your current year-to-date financials.
- Three-Year History: Ensure you have financial statements for the past three years ready.
CPA-Prepared Financials Add Credibility
If your financials haven’t been prepared by a Certified Public Accountant (CPA), consider having a CPA prepare them, especially for the most recent year. CPA-prepared reports are often more credible, which is crucial in a business sale.
Discretionary Cash Flow Over $500,000?
If your discretionary cash flow (SDCF) exceeds $500,000 for the year, ensure your CPA or accountant can provide digital export files, like Excel worksheets. Buyers typically request these during due diligence.
Pricing Your Business Realistically
One of the primary reasons businesses don’t sell is due to poor or incomplete financial records or being overpriced. Similar to selling a house, if there’s little interest, it could indicate the price is too high compared to market comparisons.
For straight talk and expert advice, call Bob Dolan, Licensed Real Estate Broker, at 954-579-4687 for a no-obligation consultation.
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