How to Prepare Your Business for Sale: What Buyers Really Look For

Thinking about selling your business? The work you do before going to market can have a significant impact on your business valuation, the buyer’s due diligence process, and ultimately the deal you receive. If you want to get the best deal from selling your business, understanding your quality of earnings, financial performance, cash flow, and overall earning power is essential. In this video, Jaimie explains what buyers look for during the business sale and financial due diligence process, including: • Why stable revenue and a strong quality of earnings can support your business valuation • Why clean financial records and tax returns matter when selling a business • How customer concentration can reduce the value of your company • Why owner dependence makes a business harder to sell • How ongoing owner investment can signal weak cash generation • Why undisclosed debt and liabilities can derail a business sale • How declining trailing 12-month performance can affect your selling price • Why business owners should begin preparing at least 12 months before a planned sale The business owners who prepare before going to market are in a much better position to grow the value of their business, avoid surprises, and negotiate from strength when it comes time to sell. ABOUT ARA Do you need help with a business valuation or how to improve your business’s value? Visit https://www.araforensics.com/ to learn more about our forensic accounting, valuation, and litigation support services. Request a Consultation: https://www.araforensics.com/contact/ Contact our office: (314) 279-9223 Jaimie Klawitter, CPA, CVA https://www.araforensics.com/about/ja...   / jaimie-klawitter   Chapters: 00:00 – Preparing to sell your business 00:08 – Understanding your quality of earnings 00:45 – Business records the buyer will ask for 01:05 – Five drivers that drop your selling price 01:10 - #1 – Customer concentration 01:19 - #2 – Owner dependence 01:35 - #3 – Owner investment 01:46 - #4 – Undisclosed liabilities 02:02 - #5 – Inconsistent or declining 12-month performance 02:23 – How to get the best deal when selling your business For general educational purposes only. See your professional advisors regarding your specific litigation or business situation.