Quick Guide

Step 1- Planning START NOW! * Identify your objectives.* Assemble your team of advisors (CPA, Attorney, Tax Advisor, Estate Planner, Financial Planner and Business Broker).* Get your business appraised; update every 2-3 years. * Report all income. Business value is primarily based on documented cash generated.* Make your role easily replaceable for a new owner.* Document your processes to ease the anxiety of the unknown. * Diversify your customer base if more than twenty-five percent of sales come from one customer.

Step 2-Valuation* Prepare financial statements and other business information. * Review the latest appraisal and understand how operational and financial activities affect the value. * The business is worth what it can produce in current cash flow and future returns to the buyer.

Step 3- Marketing* Prepare a comprehensive marketing package to present information to qualified buyers. * Use various forms of advertising including local newspaper, Internet, trade publications, and direct mail. * Qualify buyers by asking them a few questions about their interests, background, income requirements, and resources. * Before providing any detailed information, have them to sign a confidentiality agreement.*Provide the marketing package and highlight the positives associated with your business.

Step 4- Negotiation* Negotiating could be emotional and uncomfortable. Remember that price is only one component of the negotiation.* Other very important factors include financing terms and contingencies, which can significantly impact the ultimate value to you.* Communicate offers and counter-offers in writing. * Request an earnest money deposit as a sign of buyer confidence.* Use an attorney to create or review any agreement before signing.

Step 5- Due Diligence* Allow the buyer to review documents and files to verify information you previously provided.* The signed offering agreement should provide the standards for the due diligence process. * Obtaining financing and an acceptable lease are two big challenges a buyer typically needs to overcome, so assist as necessary.

Step 6- Closing* Conduct an inventory immediately prior to closing.* Ideally, have a qualified third-party manage the closing process.* Sign all final documents including Settlement Statement, Purchase Agreement, Bill of Sale, Promissory Note and Security Agreement, if applicable. A notary should be present to notarize all signatures.* Exchange funds. As the seller, you should provide validation that all vendors are paid in full.