For each step in more detail, including how to document personal expenses, read the article How to get your books ready to sell your business
Transcript
Owners ask me all the time how to get their books ready to sell. I tell them to think about selling a house and treat their business the same way.
When you sell a house, you clean it first. When you sell a business, the cleaning happens in your financial records.
Before a house goes on the market, you paint it, you declutter it, you fix that leaky faucet. Business buyers are going to be just as picky, but they aren't touring your lobby. They're reading your financial statements.
The first thing is making sure your tax returns tell the real story. According to BizBuySell, SBA lenders typically underwrite from tax returns. If that profit isn't on the return, it's going to be hard to finance.
The second is pulling personal expenses out of the business. BizBuySell's guide is clear that personal expenses only count as add backs if you can document them.
The third thing is fixing the small stuff before anyone looks. Think late bookkeeping, old receivables, a contract that expired years ago. Each one is a leaky faucet that a buyer will find.
Just like a house, a clean business shows better, and it's easier to say yes to. Save this and start cleaning up your books before anyone asks to see them.
Thinking about buying or selling a business? Talk with me about selling, or browse the video library.
