A person looks at a computer and talks on the phone to secure offers from qualified buyers

Six Must-Haves to Secure Offers from Qualified Buyers

More investors than ever before are eager to buy reputable, high-performing businesses with proven records of success.

What’s attracting these buyers? Surprisingly, it’s not only the industry a business serves, the market it supports, or the projections that it can make for future years. Buyers are also looking for transparency, organization, and clarity in the numbers, structure, and data of the businesses that are up for sale.

There are six things you need to meet those objectives and help qualified buyers make fast, informed decisions about your business—decisions that will help you secure offers from those buyers. Let's dive in.

1

Up-to-date financials.

Gather the financial statements and documents qualified buyers will want to study before making an offer for your business. Have them reviewed by a third-party accounting firm to ensure their accuracy.

 

The documents you should gather include:

  • Three years of tax returns
  • Three years of profit-and-loss statements
  • Up to three years of monthly bank statements
  • Current accounts receivables and payables
  • Current capital commitments
  • A list and categorization of the business expenses (add-backs) that a future owner shouldn’t plan to incur or won’t be necessary for future business operations
  • Employee W2s and 1099s

 

Need help finding an accounting firm? Check out these options:

 

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With Xendoo, you can access a dedicated team of expert CPAs and accountants who provide monthly bookkeeping, tax preparation and filing, and tax consulting, three services that will help you stay on top of all your financial needs. Their team can also help you with your personal tax returns, too. You can explore their plans with totally transparent pricing by following the link below, and for a limited time, you can try their online bookkeeping service free for one month. Restrictions may apply. See Xendoo's site for details.

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2

A fair valuation.

Work with a business brokerage firm or third-party valuation specialist to secure a fair valuation range for your business. Your tax returns, profit-and-loss statements, and balance sheet information will all play a part in establishing a fair valuation.

 

Ready to connect with a broker or valuation specialist? Start your search here:

3

An organized compilation of your business’s critical documents.

Create an easy-to-access file structure that includes your articles of incorporation, proof of business insurance, licensing agreements, leases, permits, vendor contracts, and customer contracts for potential buyers to review and assess. You should also consider including documents that describe your policies and strategic plans for operations, customer acquisition, growth, retention, and fending off competition.

4

A sound understanding of the reputation of your business.

Compile a list of your current customer disputes, legal and regulatory concerns, negative reviews, and testimonials. Be prepared to account for each concern and the courses of action you’ve taken to remediate and restore your reputation.

5

A compelling story.

Think about how you can tell the story of your business to prospective buyers so that they can understand your vision, the courses of action you’ve chosen, and the opportunities that’ll continue to be available after the sale of your business.

6

A plan for assisting post-sale.

Determine how long you’ll be willing to advise the new business owner after the sale of your business. Many new owners will appreciate the promise of a brief commitment to answer unforeseen questions, provide assurance to employees and customers, and ease the hardships of the transition.

What’s next?

Once the elements that will help you secure offers from buyers are in place, you can decide whether you want to work with a business broker or try to sell your business on your own.

Read When You Can Sell Your Business Without a Broker—and When You Really Shouldn’t to assess the advantages and disadvantages of each option.

 

Then, log into your owner’s portal for free articles, resources, and advice that’ll help you prepare for the steps you’ll need to take to position your business, secure offers from buyers, and negotiate your sale.

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