Get Ready


Selling a business requires careful planning—from getting your financial statements ready to be read by others, to updating your operating environment, to increasing marketing efforts.  All so that you can drive a higher selling price.


Consider these eight steps to selling your business:

  1. Start thinking realistically about the value of your company.  Reach high and then ask yourself, what do others see, what are my competitors getting, and how is my company distinguished.

  2. Get your Financial Statements in order.  If you have been preparing financials mostly for tax reporting, start generating monthly financials for your own management of the company.  Hire a CFO and start generating department profit & loss statements every month, a balance sheet, and a statement of cash flows.  Make this a monthly package that you review with your CFO, frequently.

  3. Look at your Sales Trends every month.  Sales that are on a smooth upward movement look better than sales that have irregular spikes and troughs.  Report on your sales internally listing the top 10 customers, the top 10 SKUs, the top locations where sales occur.  Study the trends and know the story behind every 'performer'.  

  4. Look at your Cash Flow every month.  This is a barometer for how money flows in and out of the business.  You and your CFO should look at the use of cash, frequently.

  5. Assess your Expenses, Budget to Actual.  Know where your money goes.  Organize it by department, project.  Evaluate Budget to Actual.  Develop procedures to hold department heads accountable for expenditures.  Make the internal profit & loss evaluation process aligned with the goals of the department heads.

  6. Have all your Contracts in order.  Every customer, every supplier, every employee, every contractor, every lease, every agreement.  They all have a contract whether in writing or by hand-shake.  Write them all down and have a file with a copy of every agreement.  Understand your obligations and the impact on a sale of the business.

  7. Upgrade your Systems and Procedures.  Start the process of implementing a new ERP system to upgrade your financial systems.  General Ledger, Sales, Manufacturing, Warehouse Management, all areas where systems and new procedures will benefit the company.  Your staff will benefit, your company will shine, and the buyers will appreciate your making the company even more ready to grow.  This one step will give you an increased valuation.  

  8. Engage an Acquisitions Advisor, like STEP.  This is your quarterback and your guide.  This step comes over six months before you want to go to market so that you are well prepared for the sale process.  

STEP Strategy Advisors guides mid-market companies for growth and to prepare for transactions that drive value.  Give us a call at 310-445-5300 to talk about your business, today. 



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