Selling a business requires you to reveal vast amounts of information that may not be at your fingertips or even exist. Since the buyer will ask for them, you must organize contracts, records, and insurance policies as you prepare to sell a company and make them easily available. These documents will be needed during the selling process, and having them ready for review will increase your credibility and authority as a competent manager running a valuable business.

Corporate Records

The corporate record book and annual reports, if you’re selling your entire business and not merely some assets, should also be readily accessible. Your corporate record book contains your original incorporation papers, business name registration paperwork, bylaws, trademarks, shareholder list, minutes of directors’ meetings, and other documents. Small companies are sometimes lax here. If these don’t exist or sorely need updating, your corporate attorney should work with you to create them.
A limited liability company is not required to retain documentation as extensive as a corporation’s. Nonetheless, you must show the document that created your business and an operating agreement. Larger, multimember, limited liability companies often don’t document minutes of membership meetings or written consents of members for actions taken, but they should be on hand.

Processes and Methods

Documenting key processes and methodologies will assure that important knowledge does not depart with anyone leaving your business, including you. Almost every organization has vital information that isn’t written down. It is imperative to capture as much as possible to demonstrate viability and value to potential buyers and to assure a successful transition. This is particularly true for you as well as for workers and management who may leave or are nearing retirement. Operations and procedures manuals should be up to date. Some of these documented processes belong in the contingency plan discussed in a later article.

These are difficult efforts to estimate since they are dependent on the size of your business, state of your current documentation, and the complexity of your operations and methodologies. It can be useful to bring in consultants with “fresh eyes” to work with your organization to produce high-quality manuals and other documentation.

Testimonials and Branding

To show off your business and its reputation, record and display customer testimonials and public relations activities that demonstrate your company’s standing and prominence. Sale and marketing literature should contain current information, reflect your company’s brand, and present it in a contemporary and consistent manner. This could be a three-month project if you dedicate resources to it.

Brands do matter when it comes to selling a business and a strong brand in the marketplace is added value when it comes to selling.  Improving branding and name recognition, however, will be more time-consuming. Having a strong brand will very likely pay off, but it does require a longer-term investment.

The Business Value of Paperwork

It is very common for much of the information required for a company to operate is in the heads of those that do it.  However, step into the buyer’s shoes and understand what a risk that is.  Taking the time to do the documentation – as boring and time-consuming as we all know it is – will improve the value of the business.

I invite you to use these ideas as you start the journey to sell a business.

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