Selling a business is a significant undertaking — but by doing advance preparation in-house in collaboration with a team of advisers, owner/managers can ensure the process runs as smoothly as possible, says Toronto corporate lawyer Kobi Bessin.
“It’s important to do a lot of advance prep work in-house to get yourself ready and assess whether or not you’re really ready to sell,” Bessin, a partner with Torkin Manes LLP, tells AdvocateDaily.com.
This preparation, he says, will include ensuring that books and records, contracts, financial information, business systems and inventory are up to date, organized and in a place where they can be easily produced.
“To the extent that you can get those organized in advance, it will make the process a lot easier both for your advisers — from a cost perspective it becomes much more efficient — and then for the other side, for the prospective buyer.”
Specifically, says Bessin, companies should look at whether contracts are properly organized for the different segments of the business, whether they are up to date and have all the amendments to those contracts and executed versions.
Businesses should also have two to three annual periods of financial records readily available.
“To have those accessible and ready is very important, as that’s something that a prospective buyer would be very interested in,” Bessin says.
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