Listen to Robert Hirsch from Freedom Factory talk about the steps you should take in preparation for selling your business. If you're interested in finding out how to get the maximum value for your business, contact Tyler Tysdal at Freedom Factory today.
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How to Prepare My Business To Sell
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Read the Podcast Transcript below
Hi, Robert Hirsch from Freedom Factory here. And I want to talk to you about one of the most common questions that we get here, which is, how do I get my business
ready to sell? Or I've decided I want to sell my business. Now what? Well, the first thing you need to do is to get your house in order to prepare your business to sell. So go and get two or three years of tax of tax records.
And financials and put those together. Get them from your accountant and get them ready to go. Second, if you haven't put together an operations manual, this would be a great time to do so. You know how your business works, you know how the different departments interrelate, but when you sell your business, we want to make it as easy as possible to transition to a new owner.
And that value is going to be reflected in the sales price. So go put your operations manual and new job descriptions together and get your house in order. And the third piece is find, you know, put your team together. Find a great broker and an appraiser. Get an idea of what your business is worth. Start to craft the story and figure out, okay, how are we going to take it to market?
When are we going to take it to market? You know, what's the current tax environment. You know, how can I recast my financials? And what I mean by that is really simple. They're going to, we're going to take your EBIDTA or your accountant can do the same thing, and we're going to translate it into seller's discretionary cash flow, which is.
A fancy way of saying all the money that your, that your business creates when you do your tax returns. It's a game of minimization, right? Tax evasion is illegal. Tax avoidance is very smart. So you're trying to pay as little tax as you can. Well, we need to translate that, you know, from some of your non-cash expenses, depreciation, you know, some of your discretionary stuff and add that back in to maximize the value accurately.
Flag all the value that your business creates, and that's gonna make a big difference. And finally, you know, what industry are you going to be in? How do we maximize your multiple? And there are ways to be able to do that. But think about what industry you're in. Figure out, you know, all your financials.
Put an operations manual together to make the transition as easy as possible. And all of this is going to be, is going to help you when you put the right team. Find the right appraisers, find the right brokers to help you prepare your business to sell, and if you need any help with this, give us a call here at Freedom Factory.
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