Note: I have removed a majority of the wording to focus on the key points of the article. If you would like to read the full article, click the link below.
When preparing a business for sale, here are three tips to help maximize the sales price:
1. Eliminate, reduce (or clarify) discretionary expenses
Remove personal items paid by your business, e.g., expenses for meals, entertainment, vehicles and other luxury items (at a minimum clearly separate them out into their own sub-accounts or annotate them).
2. Improve your financial statements
Have your CPA or business broker walk through your P&L and balance sheets to help you identify areas of weakness, e.g., excess inventory or idle assets on the balance sheet, or discretionary items on the P&L. Then, as much as possible, take actions that will remove the areas of weakness from future statements, e.g., right-size your inventory, sell-off idle assets, etc..
3. Report cash receipts
Do not hide cash receipts. Most often a potential buyer is going to base the value of your business on your tax returns, i.e., provable revenue and income.
For additional information regarding Florida business sales, acquisitions and valuations, please contact Eric J. Gall at Eric@EdisonAvenue.com or 239.738.6227. Also, visit our Edison Avenue website at www.EdisonAvenue.com or my personal website at www.BuySellFLbiz.com.
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