In case you missed it, Inga Andriessen and Robin Mann recently hosted a webinar on how to prepare your business for sale. One point that stood out was how buyers assess a business early on.
Planning ahead matters, even if you are not ready to sell yet. Preparing in advance gives you flexibility to sell when the timing is right. It often includes reviewing financial reporting, knowing key contracts, and ensuring corporate compliance (if incorporated) so due diligence does not cause delays.
If you are thinking about selling, a realistic budget and forecast is essential, and knowing your numbers is key. At the start of negotiations, buyers will do a quick review of the financials and revenue, assess the reliance on key customers or clients, and consider whether the business can operate without the owner being involved in the day-to-day operations. These factors can affect the price, the timeline, and the negotiations process.
Buyers want reliable numbers, and a strong forecast shows the business is well managed, reduces concerns, and can support smoother negotiations.
Selling a business is not just about revenue. Buyers will look closely at expenses, liabilities, and debts to understand the cost to run the business and its obligations, such as taxes, contracts and leases, and liabilities. Being organized and transparent can have due diligence run smoother and avoid last-minute price reductions.
Key takeaways
- Create a realistic forecast.
- Keep financial records up to date.
- Reduce reliance on a small number of customers, suppliers, or clients.
- Make the business less dependent on the owner.
- Identify liabilities and debt early to avoid surprises.
- And the last key point – Stay ready to sell so you can act when the market and timing are right.
Christine Allan
Firm Operations Manager and Sr. Law Clerk