Growing up we were constantly reminded of the importance of being organized and prepared and making sure that our responsibilities were being fulfilled. These two concepts have followed us now into our daily tasks both at home and in the workplace, but how well do we abide by them?
These attributes are important for any business owner, especially when a transfer of ownership is approaching. Making sure you have all of the necessary documents, including accounting, legal, and insurance paperwork will allow you to not only save time, but also increase your business’s valuation upon transfer.
Below we have listed some tips on how to ease the transfer process and get the most out of your business:
Identify proper documentation
Before you can organize anything, you must first know what it is that you will need for the transfer. Ask your M&A Intermediary a detailed Due Diligence List, so that you don’t waste time and energy gathering items that won’t add value in the long run.
Streamline your documents
Once you identify the necessary documentation, you need to organize your documents and systems. This means keeping financial records up-to-date (audited statements are ideal but if you are not going to go to that level, at least provide hard monthly closes), gathering contracts and revisiting corporate documents. Try to keep all of this information digital so that it can be easily shared. Building a Virtual Deal Room is ideal.
Create an advisory council
Professionals who know your business inside and out will be the most helpful when it comes time to transfer your company. Consider setting up a strong management team or advisory council to stay on top of transaction requirements. This will allow you to stay on track with your daily tasks, while still looking out for your business’s future.
It is no wonder that business value increases when owners have all of their documents aggregated, including easy access to accounting, legal, insurance, and other information necessary for a transaction. Make sure that you are prepared and organized in order to get the most out of your business. Bottom line is that ease of transferability equates to increased valuation.
Our team has significant experience helping business owners prepare for and complete transactions, including mergers, acquisitions, and management buyouts. Contact us to learn more.