The Key 180 Days If You Are Preparing To Sell Your Business
If you’re looking to sell a business, preparation is key. The first six months – yes, it’s that long – will be consumed by tidying up loose ends, ensuring all the required documentation is in place, filling potholes in the processes and operations and making other changes. This report breaks into three stages what needs to be done and covers in some depth the kind of changes businesses need to execute prior to going to market if they want to ensure they achieve or exceed their valuation. The article provides tips on a range of preparation – from formalizing employee contracts to creating financial reports.
Over the course of running a business, contracts can remain unsigned or expire. All contracts need to be signed and/or updated. For example, if the business has agreed to provide a service or a product to a customer at a stated price, that contract needs to be formally signed by both parties to make that contract valid in the eyes of a business buyer. An unsigned contract will not stand up in due diligence. A worst case scenario has a buyer discounting the purchase price by the value of that unsigned contract.
It is important to have all employment agreements signed. Sometimes owners avoid formal agreements and believe a handshake will do. They may have the notion or assume that a particular employee will always remain loyal and employed with them and that they will keep their information confidential, including the amount of compensation they will be paid.
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