Editor’s note: Selling your business will mean having your finances squared up. Learn more about how Bench can ensure your books are up to date and ready for the eyes of a buyer.
Whether it’s moving on to another passion project or time to hang up the suit and put on sandals, a time will come to consider selling your business. When that time comes, it can be a long-term process. Here’s what you can do now if you’re looking to reduce the headache.
Have your reports up to date
A key part of selling your business will be the due diligence. This is when your financial statements will be reviewed for accuracy and completeness. For starters, you should have an up to date balance sheet and income statement. This will be an opportunity for you to flex the state and value of your business. Unsure on how to prep these documents? Learn more about income statements and balance sheets and find out more about how Bench can help with getting your books caught up.
It’s recommended that you collect these documents and your tax returns to cover the last three to four years of business activity. Have these documents reviewed by a CPA for accuracy and consistency.
A cash flow statement may also be requested. This is a document that breaks down how cash is entering and leaving your business. These reports are also essential in creating financial forecasts which will help you prove the value of your company. (You can learn more about financial forecasting in our overview).
Check out our complete guide on cash flow statements and try generating your own with our free template.