Choosing to sell your business may be one of the hardest decisions you make in your career. Often, selling a business is a natural part of retirement by a controlling or sole shareholder, but an owner may also be looking to move on to a different venture or even a different career.

1. P R E P A R I N G T O
S E L L Y O U R
P R I V A T E L Y O W N E D
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JONATHAN F. FOSTER | CURRENT CAPITAL PARTNERS LLC

2. Choosing to sell your business may be one of the hardest decisions you
make in your career. Often, selling a business is a natural part of
retirement by a controlling or sole shareholder, but an owner may also
be looking to move on to a different venture or even a different career.
Not only does the decision to sell the company involve a close self-
examination, but an ultimately successful sale starts with extensive
planning and organizing well in advance of starting a sale process.

3. Preparing to sell a business often includes confirming or obtaining a valuation of the
business. Owners typically turn to a third party such as an accounting firm or investment
banking firm to provide an objective look at how much the business is worth. It is good to
take the time to find an advisor that is well-versed in your industry and then to meet
extensively with the advisor and provide substantial information.
Be sure to have accountants review your financial information—you’ll want to have at least
three years of financial statements with well organized supporting information – and a
review or audit of these statements. If your business has one-time or other arguably non-
recurring expenses, such as above-market executive compensation or shareholder
expenses that would not be paid after a sale, make sure that these are identified and
explained. Well organized financial information adds to the credibility of the sale process,
makes due diligence easier for potential buyers and can help to maximize value.

4. There are many important aspects of the business beyond the financial
statements to evaluate and explain. Take a realistic look at your business
model. Are your products and services competitive? What are your long-
term plans for growth? A business’s brand may not be as tangible as factors
such as cash flow, but it may be an important part of your company’s value.
If appropriate, make sure your business has an online presence. What
revenue synergies and cost savings might specific buyers realize?

5. If any of these to—do’s come as a surprise, it’s a good sign that your business needs time to
get organized well in advance of a sale process starting. But that’s fine. A pre-sale action
plan should include clear, actionable goals, a list of resources to be used, and who is
responsible for what tasks).
It is good to limit information about a likely sale. Share your intentions only with those
directly responsible for implementing sale preparation such as key executives and
advisors. The news of a sale can cause substantial uncertainty and departures among
employees; competitors can also use uncertainty about ownership of another market
participant against that company when competing for business. Sometimes, it makes sense
to run a comprehensive sale process and announce it publicly. Sometimes, a more limited
process is expected to maximize value, and the sale is not announced until it is completed.

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