List of Documents to Prepare for Business Sale

Opportunity favors those who are prepared to take advantage of it. This has been the consistent theme in the last several posts we have written on how to prepare your business for sale. We mentioned that you need to start planning for business at least one year in advance. In addition there are additional items you need to take care of as the time to list your business for sale approaches.
Your primary goal as a seller is to allay potential buyer’s biggest financial fears as well as other FUDs related to the operation of the business. It is only through proper planning and careful preparation that you can dispel buyer FUDs and make your business sale go faster and smoother. After all the longer it takes for the sale to go through the more chances of something going wrong and the sale falling through.
One of the most important aspect of getting prepared for the sale is compiling all the documents related to the business finances and operations.

When you have all the documents in order you can not only answer all the buyer questions (and there will be lots of them); but also help buyer overcome FUDs, in turn helping you. With that in mind we have come up with the list of documents that you should put together for when the buyer requests them or has questions. You don’t have to give all the documents to the buyer. All you need is to keep them in your back pocket for as and when needed.
Financial Documents

• Financials for last 3 years – balance sheet, profit and loss statements, cash flow statements
• Tax documents for last 3 years
• Any Outstanding taxes
• Creditor / payable list
• Debtor / receivable list
• Outstanding loans

Operational Documents

• Operation manual
• Key vendor list
• Key vendor agreements
• Real estate lease agreements
• Equipment lease agreements
• Equipment service records

Employee Documents

• Employee manual
• Employee records – payroll, W-4, etc.

Corporate Documents

• Corporate filings with the federal, state and local governments
• Partnership agreements

Marketing Documents

• Marketing plan
• Key customer list
• Key customer agreements

Have we missed any important documents? Do let us know in the comment section below.