Business Sale Preparation Checklist
Complete checklist to prepare your business for a successful and profitable sale
Get Preparation AssessmentFinancial Documentation & Records
Essential Financial Documents
Financial Statements (3-5 years)
- Audited or reviewed financial statements
- Monthly financial statements (current year)
- Cash flow statements and projections
- Balance sheets with asset details
- Accounts receivable aging reports
Tax & Accounting Records
- Business tax returns (3-5 years)
- Personal tax returns if pass-through entity
- Sales tax records and compliance
- Payroll tax records and compliance
- Chart of accounts and accounting policies
Legal Documentation & Compliance
Corporate & Legal Documents
Corporate Structure
- Articles of incorporation
- Bylaws and operating agreements
- Shareholder agreements
- Corporate minutes and resolutions
- Stock certificates and ledger
Key Contracts
- Major customer contracts
- Supplier and vendor agreements
- Employment and consulting agreements
- Lease agreements (property & equipment)
- Licensing and franchise agreements
Intellectual Property
- Patents, trademarks, copyrights
- Trade secrets and know-how
- Software licenses and agreements
- Non-disclosure agreements
- Non-compete agreements
Operational Systems & Documentation
Business Operations
- Operations manual and procedures
- Organizational chart and job descriptions
- Quality control and compliance procedures
- Supplier and vendor information
- Customer database and history
- Marketing and sales materials
Human Resources
- Employee handbook and policies
- Personnel files and contracts
- Benefit plan documents
- Safety and training records
- Union agreements (if applicable)
- Key person insurance policies
Value Enhancement Improvements
Financial Optimization
- •Normalize owner expenses
- •Optimize tax structure
- •Clean up balance sheet
- •Improve gross margins
- •Reduce unnecessary expenses
Operational Excellence
- •Document all processes
- •Reduce owner dependency
- •Strengthen management team
- •Improve operational efficiency
- •Upgrade technology systems
Market Position
- •Diversify customer base
- •Develop recurring revenue
- •Strengthen competitive moat
- •Improve brand recognition
- •Create growth opportunities
Preparation Timeline
Recommended Preparation Phases
6-12 Months Before Sale
Strategic preparation and major improvements
- • Get professional business valuation
- • Identify and address major weaknesses
- • Implement value enhancement initiatives
- • Begin financial record cleanup
3-6 Months Before Sale
Documentation and team assembly
- • Complete financial documentation
- • Organize legal documents
- • Assemble advisory team
- • Prepare operations manual
1-3 Months Before Sale
Final preparations and marketing readiness
- • Finalize all documentation
- • Complete due diligence preparation
- • Develop marketing materials
- • Plan confidentiality protocols
Common Preparation Mistakes
Inadequate Records
- • Missing financial statements
- • Poor record organization
- • Incomplete documentation
- • No backup systems
- • Unclear ownership records
Rushed Preparation
- • Not allowing enough time
- • Skipping value improvements
- • Incomplete due diligence prep
- • Last-minute legal issues
- • Poor advisory team selection
Operational Oversights
- • High owner dependency
- • Weak management team
- • Undocumented processes
- • Customer concentration risks
- • Neglected compliance issues
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