By Senior Associate Jeneva A. Vazquez
If you think you may want to sell your business in the future, proactively planning before you are ready to sell can have a significant payoff when the time comes. Prospective buyers value businesses with well-organized operations, accurate records, and minimal risks. By addressing legal, financial, insurance, and tax considerations ahead of time, you can significantly enhance your business’s value and attract serious buyers. Having a strong team of advisors—including a lawyer—plays a crucial role in proactively planning for a sale. Here are some key areas to consider to help bolster your business value for a future sale: Organize Financial Records During a business sale, buyers will scrutinize your financials to assess the financial health and potential of your business. Ensure all financial statements—including profit and loss statements, balance sheets, and tax returns for the past three to five years—are accurate, up-to-date, and well-organized. Address Legal and Compliance Issues Unresolved legal issues or compliance gaps can derail a sale. Have an attorney review contracts, permits, licenses, leases, and regulatory requirements to ensure compliance. Updating operating agreements, shareholder agreements, or bylaws is essential to avoid disputes and establish clarity about decision-making processes. Legally document major corporate decisions in resolutions and consents to demonstrate a culture of accountability and good governance. Conduct a Business Valuation A professional valuation provides a clear picture of your business’s worth and highlights areas for improvement. Addressing areas for improvement can increase the value of the business when you are ready to sell. Additionally, a business valuation can help you prepare for other forms of succession planning, such as negotiating buy-sell agreements. Build a Strategic Advisory Team Preparing a business for sale is a complex process that requires coordination among legal, financial, insurance, and tax advisors. A lawyer’s role is pivotal in ensuring all legal documents are current and that risks are minimized. Proactively addressing areas of legal weakness in your business before you are ready to sell provides the foundation for a smooth sale in the future. At our firm, we understand the importance of proactive planning. Our flat-fee Annual Business Maintenance Plan helps business owners address potential issues before they arise. By meeting quarterly, we work with you to develop strategies to minimize liability, enhance value, and comply with the ever-evolving legal complexities of running a business, guiding you towards setting a strong legal foundation for a future business sale. Contact us today to learn more about how our Annual Business Maintenance Plan can help you prepare your business for success—whether you’re ready to sell now or planning for the future.
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February 2025
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