Previously you put together an empty lever arch file with file dividers, and created a folder on the desk top of your computer called PYBFS. Doing that was laid out in the last issue of Prepare Your Business For Sale.
If you haven’t done so already, don’t worry. You are no worse off than 89% of your fellow small business owners. They also have not done anything about preparing their businesses for sale, and when the time comes, their businesses will also languish with the rest of the unprepared, battling to sell, also ran unsold, alongside yours!
So what are we going to put into this file? Well, let’s start off with the things you already have at hand (or should have).
Get copies of all your financial statements that you have, punch them neatly, and put them into the file behind a file divider labeled “Financial Statements”. So obvious, isn’t it? I think you’ll find that most of this series is “so obvious”, but I am always stunned that so many business owners have to revert to their accountants to get more than the most recent financials. And even those have already gone missing.
Now, I know I said “…all your financial statements that you have”, but you may have to do a bit better than that. So get hold of your accountant, and ask her for all of your financials. Go back as far as possible. Put them into the file in chronological order.
Most accountants now provide their clients with their financials in a “pdf” format. If this is the case, save a copy of each year in your PYBFS folder on your desk top. Rename them “Financials 2014”, “Financials 2013”, etc. Make sure that the “2014” refers to the fact that the end of your financial year was in Feb, Mar, Aug (or whatever) of 2014. Don’t complicate things by getting into the “Financials Mar 2013 to Feb 2014” naming structure. Sometime people will use “Financials 20140228” to be more exact. That’s also okay.
So that was fairly painless wasn’t it? Well, here’s a stunning fact: You are now better off than about 47% of the businesses being brought to market.
Mind blowing, isn’t it? But not untrue. As I write this, during this last week I have spoken to a dozen people wanting to start the process of selling their businesses by having a valuation of their business done. Seven of them will come back to me once they have their financials from their accountants. Three of those probably won’t come back to me at all because they will never get the financials sorted out. Please don’t be one of them.