Depending on the complexity of your small/home based business there may not be a whole lot to account for in the event of a sale but if there is I highly recommend the use of a certified accountant. A professional such as this will have insights you are not aware of or even care about. Having a professional working alongside you will also offer comfort to your potential buyers.
That said here is a quick “selling a business checklist” that will get the ball rolling. This list is intended to address general items that will exist with in most if not all small and home based businesses.
- Financial Having your books available for review will make a sale much easier. Balance sheet, cash flow, income statement, and statement of retained earnings should all be included. This will need to be in black and white, good books imply a good company which translates to a higher value for the potential buyer.
- Assets The assets that will be included in the sale. This will include all hard and soft goods that are property of the company. Items such as equipment, fixtures, patents or copyrights, trade names, insurance policies; notes and accounts receivable, securities for debts, and outstanding contracts.
- Motor vehicle titles. You will need documentation reflecting the transfer of titles to the buyer.
- Agreement/Contract This is the terms of the sale, what you as the seller and your potential buyer have agreed upon. Each item in this list will be part of the agreement. I have seen many businesses sold in which the owner stuck around as a consultant. Much of a company’s value can exist as intellectual property and keeping the previous owner around may prove to be invaluable.
The following are items that also may be needed. Again, a professional accountant will be all too familiar with what will be needed for your specific situation.
- Tax rulings
- Assumption by buyer of the lease
- Principal warranties and covenants
- Representations by seller
- Collective bargaining agreement.
For more information on what is needed for a small business valuation see: Selling a Small Business