Article Summary of Your Business Selling Checklist For A Simple Sale:
- Questions to Ask When Selling A Business
- Checklist of Documents Needed To Sell (in Texas)
- 5 Step Personal Business Selling Checklist
Your Business Selling Checklist For A Simple Sale
If you’re looking to sell your business, then creating a business selling checklist is the most important thing you can do.
Let’s face it – the world runs on checklists.
✔ Medical procedures checklist
✔ Aviation checklist
✔ Loan application checklist
✔ Grocery checklist
A checklist is a proven method for achieving consistent results. I’m sure that as a savvy business owner you and your employees follow checklists each and every day. Checklists keep your business running.
When you are ready to sell your business, it’s again time to turn to a checklist. In this post, I want you to know exactly what you will need to sell your business. No guesswork.
However, before we get to the awe-inspiring checklists, let’s glance at what we will cover.
- Important questions to answer when considering a sale
- Required pre-sale documents
- Key documents during the sale
Maybe you want to sell but you still have questions. I’ve put together a list of important questions I hear all the time. After you answer these questions, you’ll be ready to prepare for the sale.
What Questions Should I Ask When Selling A Business?
Before we jump into the business selling checklists, let’s address some of the most common questions I hear from business owners looking to sell.
Is my business ready to sell?
This is the question business owners wrestle with the most. And rightly so. You poured your blood, sweat, and tears into the business. The business runs well, provides for your employees’ livelihoods, and satisfies customers every day. There is no easy answer; however, if you are one of the thousands of business owners nearing retirement, it may be time to move onto what is next.
Am I personally ready to exit my business?
In most cases, there is a combination of factors that are either 1) pushing you away from your business or 2) pulling you towards something else.
Push Factors can include reaching retirement age, feeling the business has peaked, getting bored, experiencing a health issue, the need for less stress, etc… Pull factors can be desires to travel the world, get more fit & healthy, set up another endeavor or charitable foundation, or just spend more time with family. The happiest departures occur when there are just as many compelling pull factors as there are push factors.
How much is my business worth?
There are many factors that go into determining just how much a business is worth. As I’m sure you know, buyers and sellers often have very different ideas of the value of a business. A professional valuation can establish a baseline of value, but ultimately, you’ll need to convince a buyer that the price you want is right.
Will I sell for cash or will I need financing?
While some business deals are all-cash, most usually require some sort of financing. Consider whether or not you will allow a financed or partially-financed sale.
Should I sell the assets in the business or the business entity as a whole?
This is an important distinction that many owners don’t consider upfront. You want to determine right away if you plan to sell just the assets, and retain the legal entity, or if you will sell everything. Selling the legal entity rids you of both the assets and liabilities.
What will happen to my lease if I sell?
In any sale, there are many questions that need to be answered. I won’t write about everyone. This is a good example. If you are leasing, you will need to involve your landlord during the sale. You may be able to transfer the lease. If not, you’ll need to create a sub-lease agreement.
Which documents or records do I need to sell my business?
Selling a business in Texas requires a slew of documents. Below is the checklist I have used when both buying and selling businesses.
Checklist of Documents Do I Need To Sell (in Texas)
Let’s turn now to the preparation process. If you have decided to sell, you’ll need to gather quite a few documents for the proposed sale
Most states have their own requirements when it comes to selling a business. Here in the great state of Texas, at least 13 key documents are required. Regardless of what you read online, make sure to get accurate counsel from your legal team or from the Office of the Secretary of State. Selling a business is complicated and it is important to do it right.
Below is a checklist for selling a business that I’ve created for you. This is a good place to start when preparing your sale.
✔ Profit and loss statements (YTD and past the 3 years)
✔ Income statements (YTD and the past 3 years)
✔ Balance sheet (YTD and the past 3 years)
✔ Tax returns for the past 3 years
✔ Property deed or lease agreement (if applicable)
✔ Asset list (inventory, DBA, equipment, and anything else that might transfer with the business)
✔ Bank statements (including credit card records) for the last 3 years
✔ Biography of the business
✔ Business owner biography
✔ Staff details and biographies (if applicable)
✔ Contracts and other licenses
✔ Accounts payable and accounts receivable
✔ Sales information, including sales by customer
In addition, here is a non-exhaustive list of other documents that might be needed.
✔ Franchise agreement (if applicable)
✔ Licenses, certifications, and registrations pertaining to the company
✔ Patent and/or trademark information (if applicable)
✔ Business plan
✔ Marketing plan
✔ Procedures manual related to the business
As you may have already learned, selling a business has many moving parts. Following a comprehensive checklist can ensure that you don’t waste time during the sales process.
5 Step Personal Business Selling Checklist
Did you know that 75% of business owners who sell their business are unhappy a year later?
In most cases, it’s because they weren’t personally prepared to sell their business.
Below is a chart with 5 steps you should take before selling your business to make sure that you are happy with the decision:
In addition to a business selling checklist, here’s an ebook called The Exit Checklist that you can read now:The Exit Checklist Ebook
Summary Of The Business Selling Checklist
One of the best tips for selling your business I can give you is to create a business selling checklist. In this post, we’ve covered a lot of ground on business selling checklists. You now have a high-level understanding of 1) Should you sell, 2) What you need to gather before selling, and 3) Requirements for the sales process. If you need more information, or if you are looking to sell your business today, contact me. I own, operate, and most importantly, buy businesses.
Have any questions or comments about Your Business Selling Checklist For A Simple Sale? Please contact me!