The key to selling a business is to think like a potential buyer and predict what kind of questions they may have. A potential buyer would want to get maximum clarity and confidence from the seller’s end to make an informed decision. If the seller succeeds in providing legitimate and faultless documentation, it would most definitely persuade the potential buyer into taking over the business right away. Financial statements project a true picture of the financial position that further help in devising short-term and long-term plans. The amount of detail required by some investors can be overwhelming for most sellers and it is justified as they have all the right to be certain about their decisions. A company should at least have a clean and accurate balance sheet which preferably should be reviewed or audited by a third party. A clearly documented accounting systems and controls along with well documented revenue recognition policies can make things easier on both ends. These kinds of records are useful for your own purposes in determining which areas can be further improved. Efficient planning and preparation can become a major key to success when preparing to sell your business, it’s a great idea to consider things from the buyer’s point of view. Buyers prefer low risk with high reward when they consider buying a business. Ultimately, buyers will look for good cash flow and determinants that improve potential for further growth. A business is worth what someone’s prepared to pay for it so a seller needs to figure out ways to get an up-to-date valuation of the business. Demonstrating how efficient your internal processes are is important as it will show buyers that your business is functioning proficiently. Good financial records result in good forecasting and put a budget in place. It is important because it will be able to forecast the sufficient cash flows needed to keep the operations smooth and running. At Ali Syed CPA we provide professional consultations to potential buyers and sellers in order to mitigate risks that come with buying the business. We focus on determinants that are worthy of scrutiny while making such substantial decisions.
