Selling a business requires expertise in each area of your business. Requesting expert assistance in preparation of selling your business can help you uncover hidden business value. The “if/then” scenarios available in a sale are numerous and have significant dollar impacts based on the decisions made. Time spent with a tax accountant can help plan for various tax-related scenarios and lead to significant tax savings when you sell.
It is prudent to ensure you have a legal team supporting you in a sale to protect you from potential liability and ensure your wishes are properly communicated in the purchase and sale document. Depending on who is acquiring your business, financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) may be required. Also, future events such as working capital true-ups and earnouts may be calculated based on GAAP. Since your business may be kept on a cash basis or tax basis, having a trusted CPA assist you in converting your financial statements to the accrual basis required by GAAP will ensure you are prepared and understand your financial statements.
Most businesses today are reliant on technology in some capacity in order to conduct their day to day operations. A serious buyer will want to understand the technology used by a potential target to uncover hidden potential liabilities, evaluate if the system used by a target will provide the information or service needed in the future, and evaluate cost. While a buyer may bring in its own team to conduct due diligence on your technology, having an expert available that can “speak the language” is a must have.
A trusted advisor can lead cost savings and fewer headaches during the sale process. Identifying those advisors before entering the process is a benefit to a seller. Before you enter the process to sell your company, you can help yourself considerably by doing adequate planning and preparation. Engaging a sell-side due diligence team can help you go to market with a firm understanding of how your company will be valued and identify and preemptively address what a buyer may consider to be a red flag that could derail or delay the transaction.