Deciding to sell your business and Investment Real Estate is an emotional decision. Once you think about selling then it is time to make the move – assuming all decision makers are on board with this decision. Once you decide that you want to sell then make the move. Marv Levy, the NFL Hall Of Fame Coach once said that “once a player thinks about retiring then he has already retired.” This statement by the former Buffalo Bills Head Coach and General Manager applies to business and Investment Real Estate owners as well. Once you think about selling then you are already making an emotional move toward selling.
The first area to understand is that books and records are important. A business and Investment Real Estate needs to be able to justify a price through tax returns, equipment values and inventory values. A pure “cash business and Investment Real Estate” with no substantiating data is very difficult to sell. But in these “cash business and Investment Real Estate” situations where the actual cash flow and declared cash flow are different, there are still ways to prove the entire cash flow through a second “book” or receipts.
The second area to understand is that you should keep the business and Investment Real Estate running as is and NEVER tell anyone that you are selling. Any hint or leak that you are selling could be catastrophic to the business and Investment Real Estate and the business and Investment Real Estate’ future. Employees and customers are very good at noticing changes that may indicate a business and Investment Real Estate is for sale. This will have a devastating result on the business and Investment Real Estate.
Once the decision has been made to sell, you have to prepare various facets of your business and Investment Real Estate before taking the step toward selling.
Buyers will want to review several items during due diligence.
The following is a list of what most buyers want to see:
1. 3 to 5 years of Accountant prepared financials
2. Interim Profit & Loss statement for current year
3. Inventory list with value of inventory at your cost (not retail)
4. Equipment list & value of equipment at current market value (used)
5. Franchise or licensing agreements
6. Employment contracts
7. Vehicle list
8. Vendor list & Customer list
9. Description of the business and Investment Real Estate
10. Copy of the lease
Here is what you DO NOT want to do…
1. Tell anyone that you are going to sell – confidentiality is of utmost importance
2. Change the business and Investment Real Estate models or daily operations
3. Take cash out of the business and Investment Real Estate that will alter subsequent financial statements
Okanagan Real Estate Kelowna Vernon Penticton Summerland Oliver Naramata Update Raymond MAASKE 250.878.2218
Real Estate, Kelowna, Vernon, Penticton, Summerland, Oliver, Naramata, Update,
Raymond MAASKE, is an accountant and licensed real estate broker with considerable experience in commercial and residential Real Estate. He has owned and managed a wide range of businesses and continues to build solid relationships with businesses and BUYERS & SELLERS.
Real Estate Specialist, TerraCorp Real Estate Services
250.878.2218 | RaymondMAASKE@gmail.com | TerraCorpRealEstateServices.com | Skype: raymond.maaske | Okanagan, British Columbia, Canada