IMPORTANCE OF RECORD KEEPING
FOR SELLING YOUR BUSINESS
Meet with an FNBC Agent at our office, your office or anywhere the two of you can meet confidentially
After a review of your business financials, you will have an accurate fair market value of your business
Whether or not you are considering the sale of your business this year,
next year or twenty years from now, we cannot overemphasize the
importance of keeping good books and records.
At a minimum you should prepare or have prepared monthly profit and
loss and balance sheet reports. Many small business owners use
QuickBooks or other similar programs to prepare their own reports; the
reality is that annual adjustments and entries such as depreciation and
amortization of certain line items are not included in self-generated
reports except by those with some accounting training.
But excluding those considerations, you are way ahead of the game if you
will get those reports monthly. Not only are the essential in helping you
manage and grow your business, they will be instrumental when the time
comes to sell your business.
Both buyers and lenders will rely heavily on these reports. They tell the
story of how your business is doing, are you accumulating assets, are you
profiting from the operation of the business (plus they show lenders and
buyers how your business in your business category compares to similar
Without these reports you are relying on your check register to run your company. A very dangerous practice indeed.
From the perspective of a business broker, the monthly statements are crucial in preparing an evaluation of the business, making sure that there are no surprises that pop up when a serious buyer is found. Nothing will run off a qualified buyer more quickly than shoddy or non-existent bookkeeping.
Do Not Look at the expense of monthly accounting as a cost of doing business. Rather, look at it as an investment that will reap big rewards for you when the day does come to sell.
Importance of Record Keeping For Selling Your Business