This blog series, Prepping for an M&A Deal, will provide actionable tips and insights on how to prepare your business for sale. In this first blog, we’ll cover the basics—enjoy!
Looking to sell your company in a year or two? Your first step is getting your financials, contracts, and governance in place to maximize your business’s value. Buyers expect transparency, growth potential, and well-managed processes. If this sounds like unfamiliar territory, keep reading—you’ll have it down in no time!
#1: Get Your Financials in Order
Having organized, accurate financials is crucial before even thinking about selling. Most buyers prefer your business to follow GAAP standards, which provide transparency and make your company easier to evaluate. Consider whether your financials will be unaudited, reviewed, or audited. Some smaller businesses have reviewed financial statements, which provides greater certainty to the buyer.
#2: Demonstrate Business Success
Buyers need proof of your company’s success. Track KPIs like profitability, customer retention, and growth potential to show how strong your business is. This step will make the sale process smoother.
#3: Vendor and Customer Contracts
Ensure all contracts, especially with major customers, are valid, signed, and up-to-date. Expired contracts can raise serious concerns during a deal and hurt your credibility as a CEO, or at least require a lot of follow-up during the deal to fix.
#4: Corporate Governance
Buyers want to see a well-managed company with structured governance. Regular board meetings and clear policies show transparency and responsibility, building trust and reducing red flags. Make sure that your board and shareholder minutes are up to date.
#5: Regulatory
Ensure your business complies with all relevant regulations and that you have obtained the necessary permits to operate legally.
#6: Human Resources
Make sure that your employment and contractor agreements are up to date, your employee handbook is up to date, and that as applicable to your business you have signed invention assignments agreements for employees and contractors.
Feeling overwhelmed? Consider having an attorney review your company pre-sale and hiring a fractional CFO to help manage your financials and get everything ready for sale.
Now that you’ve got the basics down, stay tuned for our next post on the letter of intent! If you need any legal help or guidance as you prepare for your M&A journey, don’t hesitate to reach out—we’re here to support you every step of the way!
Your legal team,
Inspire Business Law Group.