5 Ways to Prepare Your Business to Be Sold
August 7, 2018 (Investorideas.com Newswire) When it is time to say goodbye to business ownership, you need to make sure to have all of your bases covered. The transitioning of your business can seem like a daunting task, but there are things that you can do to make it easier as you are handing over the baton. If you are working with the best PEO service for small business, you will be sure everything goes smoothly from start to finish.
What is a PEO? PEO stands for personal employer organization, and a PEO helps streamline your HR processes so everything can be in order when you sell your business.
#1 - Get a Business Valuation
To get a true idea of the worth of your business, you need to get a business valuation from an objective source outside of the company. When you have a professional valuation done on your company, it will give you a basis for knowing whether an offer is good or if you should wait for another offer. You want to know what you can expect to net from the sale of your business. You will also learn what your business's market position is, strengths, weaknesses and financial situation. If you have any noticeable weakness, you should work on correcting those before you put it on the market.
You can get valuations from accounting firms, regional business brokers, investment banking firms and more. You need to ensure the company that is doing the work can access the most current national data relating to privately held transaction in your specific industry. If they have experience selling businesses like yours, that is a bonus.
#2 - Get Your Bookkeeping in Order
When buyers begin to evaluate your business, they will want at least three years' of information regarding your finances. To give the best impression, give them as many formal statements as you have access to and this will make it easier to get through due diligence. You want to think of forms that are account-reviewed instead of forms that are generated internally.
#3 - Organize Legal Paperwork
All of your legal documents should be in order, so you do not cause a delay in a sale of your firm. Make sure any papers of incorporation, licensing agreements, permits, leases, or other contracts are in order as well as easy to access in case a buyer wants to act quickly.
Keeping documents organized is one of the most important parts of record keeping. If you can't find what you need, you might as well not have it.
#4 - Management Takeover
If you are no longer with your company, you need to know who is going to take your place. Whether it be an internal employee or someone that is going to be put in place by the new owner, you need to figure that out, so the buyer has complete confidence in his purchase.
Having conversations about management takeover early on will enable you to prepare your employees for what is happening in your company. The less confusion and fear there is in your company as the transition begins, the better.
#5 - HR Administration Continuity
When you are getting ready to hand off your company, you want to make sure you have everything covered. We talked about a PEO earlier and having a partnership with a PEO is one of the easiest ways to ensure HR administration continuity. While you may be leaving your business, you don't want to leave your buyer standing there confused.
Having a PEO will allow you to have orderly payroll and tax cutovers, ability to do evaluation of predecessor and successor tax provisions for both federal and state taxes, ability to quickly deal with workers comp policy change, professional transition and admin of employee benefits plans for both medical and retirement plans as well as other vital benefits.
Choosing the Best PEO
If you plan on using a PEO to make selling your business easier, you need to choose the right PEO for you. While there are many great PEO companies doing business today, you do want to ensure that you pick the right one for your company needs. This means clearly defining what you want out of a PEO and how it is going to help you through the transition.
When you are vetting the various PEOs you are considering, don't be afraid to ask the hard questions. Just because you are selling your company, it doesn't mean that you don't want to find the best PEO that is going to last for years on end as the business builds. Make sure to ask them how many resources they have as well as what level of customer support they can provide.
Checking for voluntary certifications and accreditations is another factor that can allow you to feel safer with the PEO that you choose to go with. There are two different ones that you can look for when you are researching these companies.
While selling your business may be a big step, it doesn't have to be a stressful one. Whether you are retiring or going on to your next venture, there are plenty of things to think about other than business once you get it sold. When you leave the business in the best shape possible, you will be able to move on with peace of mind knowing that you did what was right by your business and someone now owns a great company.
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