{"id":6047,"date":"2023-11-07T12:25:13","date_gmt":"2023-11-07T12:25:13","guid":{"rendered":"https:\/\/fusacq.ca\/?p=6047"},"modified":"2023-12-14T17:29:41","modified_gmt":"2023-12-14T17:29:41","slug":"prepare-for-the-sale","status":"publish","type":"post","link":"https:\/\/fusacq.ca\/en\/prepare-for-the-sale\/","title":{"rendered":"The Steps to Consider Preparing for The Sale"},"content":{"rendered":"

We have listed the steps we recommend:<\/p>\n

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  1. Cash management<\/strong> \u2013 to be eligible for the capital gain, the business must have less than 50% of its value in non-performing assets (cash, advances, etc.) during the two years preceding a sale. We have encountered a few cash-rich companies that lost the exemption by not managing that aspect. These funds or advances must therefore be removed from the balance sheet. Speak to your tax specialist \u2013 accountant to find out more about this. This step is the easiest as well as the quickest and can earn you a good difference in the net amount of sale proceeds in \u201cyour pocket\u201d when closing the sale.<\/li>\n
  2. Your share structure<\/strong> \u2013 while you’re at it, go over this with your professionals. Depending on the value of your business and your personal situation, certain strategies can be considered \u2013 management companies, trusts, different classes of shares. Carefully assess the cost, possible gains, and profitability as well as the consequences of the options. Feel free to ask questions and think proactively with your tax professional.<\/li>\n
  3. Manage your balance sheet<\/strong> \u2013 excess assets are harder to monetize in trades. If you look at your company from the outside \u2013 what assets can you have? Use these funds to reduce any debt and solidify your balance sheet position.<\/li>\n<\/ol>\n
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    • Is the level of inventory justified? Some inventory is not accurate, either because it is spent, and it is undervalued or dormant parts\/lines that could be liquidated (a buyer will not give anything for it). Inventory that is not “rotating” is often written off upon sale.<\/li>\n
    • Do you have equipment that is incorrectly accounted for? Are you able to identify the major maintenance expenses that increase the value of the equipment, but are at the expense?<\/li>\n<\/ul>\n
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      1. Manage your income and expenses<\/strong> \u2013 It’s time to properly recognize income, work in progress and accrued expenses as they progress. For expenses, purify what belongs to the company.<\/li>\n<\/ol>\n
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        • In terms of real estate, values have increased so much \u2013 if you own your building \u2013 are you paying yourself normal rent (this will affect the profitability of operations)?<\/li>\n
        • At the shareholder compensation level, make sure it’s clear and easy to trace \u2013 no matter how much you pay yourself, a buyer will normalize your compensation to market standards to gauge expenses.<\/li>\n<\/ul>\n
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          1. The most important thing in preparing for a sale, however, is human resources<\/strong>. This point is all too often overlooked. If you want to maximize the value of your business, it should be as less dependent on you as possible. The strength of a company is often the person in charge, however if we are faced with a company that depends on its founder, the value of the goodwill is greatly diminished.<\/li>\n<\/ol>\n
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            • At the customer level \u2013 is it attached to the individual or to the company \u2013 who manages the relationship on a day-to-day and strategic level?<\/li>\n
            • For operations \u2013 is the team autonomous or do the solutions always come from the contractor?<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"

              We have listed the steps we recommend: Cash management \u2013 to be eligible for the capital gain, the business must have less than 50% of its value in non-performing assets (cash, advances, etc.) during the two years preceding a sale. We have encountered a few cash-rich companies that lost the exemption by not managing that […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[85],"tags":[],"class_list":["post-6047","post","type-post","status-publish","format-standard","hentry","category-preparing-for-the-sale"],"acf":[],"_links":{"self":[{"href":"https:\/\/fusacq.ca\/en\/wp-json\/wp\/v2\/posts\/6047","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fusacq.ca\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fusacq.ca\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fusacq.ca\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/fusacq.ca\/en\/wp-json\/wp\/v2\/comments?post=6047"}],"version-history":[{"count":2,"href":"https:\/\/fusacq.ca\/en\/wp-json\/wp\/v2\/posts\/6047\/revisions"}],"predecessor-version":[{"id":6056,"href":"https:\/\/fusacq.ca\/en\/wp-json\/wp\/v2\/posts\/6047\/revisions\/6056"}],"wp:attachment":[{"href":"https:\/\/fusacq.ca\/en\/wp-json\/wp\/v2\/media?parent=6047"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fusacq.ca\/en\/wp-json\/wp\/v2\/categories?post=6047"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fusacq.ca\/en\/wp-json\/wp\/v2\/tags?post=6047"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}