It is no secret that owning and operating a business is not for the faint of heart. Deciding when to buy or sell a business is particularly daunting. Whether you’re seasoned in business acquisition or looking to sell your own business, consider the types of questions buyers need to ask before making any decisions.
- What is the financial health of this business? Best practices suggest sellers will compile and make available three to five years’ worth of detailed financial records. If a business owner is reluctant to provide financial records, it may indicate problems. Tidy bookkeeping lends to smoother transactions for both seller and buyer.
- What will it take to keep the business running? From small startups to large employers, keeping a business compliant takes time and commitment, especially when payroll duties are considered. Utilizing a payroll provider can ensure efficiency and timely tax filings. By outsourcing these functions to experts, business owners have more time to focus on building the business.
- Can the business become profitable? Utilizing prior years’ financial records to project future growth is a great way to gauge profitability. Creating comparative profit and loss and cash flow statements can give an idea of where the business could be in one to five years.
