Planning Your Business For Sale – Information Needed by Business Brokers and Intermediaries

The specific information that will be required by a company broker or intermediary to prepare your business for sale depends upon the industry in which your business operates. However , certain information is going to be necessary and beneficial regardless of sector:

o Three to Five Years Historical Economic Statements / Tax Returns – Even though a business buyer will be paying you for what the business is set to accomplish going forward (as of the date associated with sale), they will look to your historic financial statements (and tax returns) to assess the risk of your expected earnings stream.

o Interim Monetary Statements for the last Three Fiscal Intervals – Very few business transactions will certainly close at the end of a company’s fiscal year. As a result, interim financial claims will be required by a buyer, and your broker / intermediary to fill up the void between the company’s most recent fiscal year end statements and the current date / date associated with sale.

o List of Assets Integrated and Excluded in the Sale : Your broker / intermediary will have to demonstrate to a buyer exactly what they are getting in return for their investment. Developing a prepared list of both tangible plus intangible assets included and excluded from the transaction not only helps obviously present to a buyer what they are getting but also helps eliminate any differences at closing.

o Schedule of Indebtedness of the Business – If the proposed transaction is an asset purchase or a stock sale will figure out the relevancy of this information. If only the assets are being purchased with the acquirer, the existing debt obligations will remain the responsibility of the seller and be appealing to the acquirer only to make certain that just about all claims to the assets are taken out at closing. However , if the customer is purchasing an equity stake in the company, they will need to understand the company’s full financial picture in order to make a buying decision.

o Before Appraisal and Valuation Reports : Although a current valuation or appraisal may be one of the services offered by your own broker / intermediary, providing formerly completed valuation reports will help your own representatives and buyers understand how your company has changed and grown over time.

o Business Plans and Projections – Although a buyer will look towards the historical financial statements for an knowledge of risk, price will be determined depending on what the business is set up to achieve in the years ahead as of the date of selling. Nobody has a better understanding of this particular than you, the seller. The best way to show your future expectations is to prepare a business plan that includes financial projections.

o Marketing Materials – Nobody knows your business and its products or services better than you choose to do.
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Chances are you’ve been selling the benefits of your products and services to customers for years. There’s no need for your representatives to recreate the wheel. The benefits of your products and services to your customers are the same ones your broker / intermediary will have to sell to a prospective purchaser.

u Economic and Industry Data – Although your broker / intermediary will do their own economic and business research, there may be information available to you as an industry insider that is not readily available via external sources. Providing this information for your broker / intermediary will help all of them cast your business in the best possible lighting when working with buyers.

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