Sellers, preparing solid financials ahead of time will help determine a fair asking price, while giving you the opportunity to identify potential gaps or shortcomings.

Preparing your past two to three years financial statements by a CPA is the first step toward understanding the overall value for your business.

Buyers looking for business opportunities that come across businesses for sale that have finals prepared by a CPA often place more weight on financials that have been professionally audited and will have much more validity and the potential to increase your asking price.

Taking the time to collect and organize the right documents will make your business more appealing to potential buyers. Solid documentation of a profitable history is perhaps the clearest way to illustrate the financial value of your business. Being prepared with an organized package of documents not only reflects well on you and your business, it will ward off unnecessary stress.

Because buyers will expect to see certain documents that show your business is profitable and a good investment it is important to strategize, map out and collect the following documents in preparation for your business sale:

• Business executive summary, business overview, business profile
• Business tax returns for the past 2-3 years
• Current and 2-3 years profit & loss statements
• Current balance sheet
• Current lease
• Cash flow statement
• Employment agreements
• Insurance policies
• Non-disclosure/confidentiality agreement
• Personal financial statement for the buyer to complete
• Professional certificates
• Purchase agreements
• Seller financing agreements
• Supplier and distributor contracts

Preparing solid financials prepared and audited by a CPA will help provide confidence for potential buyers considering the purchase of your business.

CPA audited financials will also help you develop improvement strategies and increase the value of your business.
This author recommends to engage with a professional business broker.

By developing a relationship with a business broker ahead of time, you’ll have the opportunity to learn what buyers are looking for, what’s in demand, and ways in which you can make your business more attractive and easier to sell.

A business broker can also help you determine a fair asking price and the best time to market your business for sale.