William Eve, a personal finance writer who also writes for small businesses wrote this insightful article for us where he shares useful and practical steps on how small business owners can organize their finances better.

In between surfing, cooking and traveling, William writes about saving money, property investment and real estate for a home loan comparison service: Home Loan Finder.

Finding a buyer for your business is tough as it is. In order to make the process as quick and painless as possible there are some plans you implement. Here are some steps that you should think about to ensure you get the most money possible for selling your business.

Are you planning a business exit? Planning is key if you’re hoping to fetch the biggest possible profits from selling a business. The following steps will give you the lowdown on how to do this smartly.

Follow these steps to help you stay organized and make selling your business an easier and much smoother process.

1. Keep Accurate Records

This is the first thing that potential buyers and their advisers will want in the purchase or appraisal of your business. With today's computer technologies and programs, you have no excuse not to have records of your business completely automated.

This way you can produce the latest profit-and-loss statements and current balance. Any bank that is thinking about or looking into the acquisition of your business will require you to provide reports for the last three years to decide how much they can pay to the buyer. If the buyer can not get enough money from a bank, you have two options:

Either provide financing yourself, or sell for a lesser price.

Keep good records and you will be more likely to sell for a higher price.

2. Grow Income

Growth trends are very important. A buyer values your business's future earnings based on past results. If the numbers of the business are increasing, future earnings growth will have an upward bias, and so the value will be higher.

To grow revenue, implement a marketing and advertising strategy.

Also move forward in hiring of new sales reps to get income streams flowing.

Do not wait to sell when your business is dying down.

3. Deposit All Cash in the Bank

Most buyers will value only the income they can see. That means the cash that is in the bank and on the tax return. Yes, you will pay more in taxes than you do today, but you will get a multiple of that cash when you sell.

4. Separate Personal Benefits and Business Expenses

Instead of having to explain all personal costs that are paid through the company, just make sure to properly eliminate these expenses from your corporate expense accounts.

A bank will not recognize these personal expenses when they are starting to consider a loan.

5. Place Appropriate Management and Staff in Place

Family run businesses are always hard to turn over to a new owner. The best step to take is slowly remove the family members and keep the staff that will stay on and work for the new owner. It is also important to hire and train a good manager that you can delegate most of the work to. Remember, no buyer will want to work more than 60 hours a week themselves.

6. Have Room for Growth

If you find that your business’s revenue is limited by its current location and equipment, this will be reflected in the bank’s assessment of your value. It is key that you either sell your business before reaching this point or move to a new location with newer equipment to raise your value.

7. Keep the Facilities in Good Repair

The business value will be higher if everything works and looks good. Buyers want everything in working order on the day of closing, including the old pieces of equipment that you no longer use.

8. Control, Manage, and Document Inventory

Do not fiddle with the inventory as a tax-saving strategy. This will catch up with you one day, and you could face big tax consequences. In addition, you need to keep your inventory lean and moving. If it is old, donate it or mark down your prices.



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