{"id":6050,"date":"2023-11-07T12:24:53","date_gmt":"2023-11-07T12:24:53","guid":{"rendered":"https:\/\/fusacq.ca\/?p=6050"},"modified":"2023-12-14T17:23:27","modified_gmt":"2023-12-14T17:23:27","slug":"why-and-how-to-prepare-for-the-sale-of-your-business","status":"publish","type":"post","link":"https:\/\/fusacq.ca\/en\/why-and-how-to-prepare-for-the-sale-of-your-business\/","title":{"rendered":"Why And How to Prepare for The Sale of Your Business?"},"content":{"rendered":"

First, you should know that a business should always be \u201cin order\u201d, that is to say: ready for sale! Indeed, you never know when a strategic buyer may come forward and present an attractive offer; more than 70% of transactions are made with companies that are not on the market, that are not listed \u201cfor sale\u201d.<\/p>\n

Why should you be prepared:<\/p>\n

    \n
  1. To be able to make a better transaction.<\/li>\n
  2. To know how to react to an unsolicited offer.<\/li>\n
  3. To facilitate\/accelerate a possible transaction.<\/li>\n
  4. To understand the tax impacts and know how much “net” money we will have after the transaction.<\/li>\n
  5. To establish where your limits are, such as, transaction amount, terms, transition period\u2026 so many factors to consider.<\/li>\n<\/ol>\n

    How to prepare?<\/p>\n

      \n
    1. Have a recent valuation of your business and understand the levers that can cause the value of the business to fluctuate, up or down.<\/li>\n
    2. Eliminate hurdles: ensure that you have a shareholder agreement, strengthen the management team. The more you are essential in the daily life of your business, the less it is worth.<\/li>\n
    3. Eliminate the extras: excess or non-performing assets, discretionary spending, unnecessary employees.<\/li>\n<\/ol>\n
        \n
      • At the BALANCE SHEET level, you must clean up non-useful assets \u2013 that is, sell the inventory that is not required for normal operations. Same goes for the equipment that is not used regularly nor essential. We saw a client generate $500,000 by liquidating non-performing assets \u2013 no buyer would have valued it!<\/li>\n
      • Advances from or to the shareholder and between related companies should be cleared to the extent possible (depending on cash on hand).<\/li>\n<\/ul>\n
          \n
        1. Have reliable financial statements that accurately reflect the performance of the business. At the RESULTS level, it is necessary to ensure proper recognition of revenues \u2013 are they in the correct accounts, in the correct year, are the discounts and returns allowed recognized? Same thing with expenses\u2026 You must know the figures and certain financial ratios of your company.<\/li>\n
        2. At the OPERATIONAL level, documenting processes, roles, and job descriptions can help you sell the business. The more the sustainability of the operations and the customer base are well established, the higher the multiples obtained will be and at the same time, the faster the company will be able to sell.<\/li>\n
        3. \u201cClean up\u201d: fixed assets, management systems, contracts, etc., everything should be in order and well documented. Take care of the \u201cpapers\u201d: Minutes Book (are your resolutions up to date), permits\u2026 everything must be in order and quickly accessible\u2026 buyers will ask for them.<\/li>\n
        4. Pay particular attention to EBITDA: is it down or up? Most buyers place a lot of importance on EBITDA.<\/li>\n
        5. Benchmarking: how do your results compare with other companies in your industry?<\/li>\n
        6. The sales\/market development strategy: who are the customers? Is there a dependence on one or a few customers, how to diversify and reduce the risk?<\/li>\n<\/ol>\n

          Here is a small list of things not to do if you want to sell in the short term:<\/p>\n

            \n
          • Buy another operation.<\/li>\n
          • Relocate the business.<\/li>\n
          • Make significant structural changes at the management level.<\/li>\n<\/ul>\n

            Continue to take good care of your employees, your customers; they are important to ensure a good transaction!<\/p>\n","protected":false},"excerpt":{"rendered":"

            First, you should know that a business should always be \u201cin order\u201d, that is to say: ready for sale! Indeed, you never know when a strategic buyer may come forward and present an attractive offer; more than 70% of transactions are made with companies that are not on the market, that are not listed \u201cfor […]<\/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-6050","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\/6050","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=6050"}],"version-history":[{"count":1,"href":"https:\/\/fusacq.ca\/en\/wp-json\/wp\/v2\/posts\/6050\/revisions"}],"predecessor-version":[{"id":6051,"href":"https:\/\/fusacq.ca\/en\/wp-json\/wp\/v2\/posts\/6050\/revisions\/6051"}],"wp:attachment":[{"href":"https:\/\/fusacq.ca\/en\/wp-json\/wp\/v2\/media?parent=6050"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fusacq.ca\/en\/wp-json\/wp\/v2\/categories?post=6050"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fusacq.ca\/en\/wp-json\/wp\/v2\/tags?post=6050"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}