When selling a business in the Orlando or the Central Florida area it is always a good idea to gather up as much information as possible when looking to sell the business to a buyer. Whether you are working with a business broker or working to sell the business yourself, business buyers as a whole will be looking for the same key points of information. The only difference between buyers is that different buyers weigh the level of importance of each point differently.
Today we are going to address a business’s financial information, a key issue for most buyers when looking to purchase a business. As a business broker selling companies in the current Central Florida market we at Crowne Atlantic Business Brokers find that a business’s financial information is in most cases the most important factor when looking to purchase a business. Buyers call us on a daily basis searching for every type of business imaginable from a lawn service to a pizza shop. We get calls for manufacturing companies, gas stations, dry cleaners, medical businesses, and distribution businesses for sale. In almost every instance, a buyer will ask if they can see the business’s financial information…………and it is typically one of the first questions asked. Some buyers view the financial information as being so important and so hard to find that many times they do not even seem to care what type of business they purchase, as long as the business has solid books or good tax returns.
The irony is that the one factor that most business buyers search for is the one factor that most small business owners cannot provide or they can only provide them to an extent. In fact, a significant majority of businesses for sale whether they are in Florida or elsewhere in the United States at first glance appear to have terrible financial record keeping practices. Worse than that, some businesses have little or no financial record keeping whatsoever. Many of these businesses have a great deal of cash in the business or personal deductions masked as business expenses. Some document their most of their sales and expenses on their annual tax records but they refuse to declare any profit on their tax records in order to reduce the taxes they have to pay. These type of actions make the business selling process much more difficult because most buyers view a business’s records as their number one criteria throughout their search. If a business cannot provide adequate record keeping, most buyers tend to walk away.
At Crowne Atlantic Business Brokers, we can help business sellers determine the best way to market their businesses for sale and help make sure that their financial records look the best that they can. Buyers typically like to see financial records for the previous 3 years if possible and financial numbers that reflect the business’s year to date earnings. Information on tax records is preferable according to most business buyers, followed by profit and loss statements on a program such as quickbooks or excel. While it is not required for a business to have perfect financial information in order to sell it to a buyer, good books and records typically assure that business sellers can obtain a higher sale price when they sell their business. Business Sellers that have good books and records will also find that fewer issues due to buyer fear and anxiety, or other factors arise simply because a buyer feels more comfortable that every aspect of the business they are looking to purchase is on the legit side of the business for sale spectrum. The great news is that it is never too late to start keeping excellent books and records. Business brokers can often assist in this process, especially if you are looking to sell your business in the near future.
If you would like more information on Selling your business in the Central Florida, Florida, or Orlando area please feel free to check out our website www.crowneatlantic.com or ask us about our Free 360 valuation at 407-478-4101.