8 mistakes to avoid when selling your business

Here are the crazy eight mistakes you make when you sell your business:

Mike Bosma

8. You never scrub your fixed asset list

Many reading this article have recently filed their personal property declaration with the county assessor.

The mistake is innocent enough; you report the current year additions on the declaration. You give this same list to the buyer. You make a representation that all of the assets will be transferred to the new owner. If you look at the detail, you might ask yourself if the “new” computer you bought for Y2K is still around.

Also, make a mental note that assets that have been disposed of carry a residual value for property purposes, so you are probably overpaying that tax. The problem in the sales scenario is the buyer will want to know where all these hard assets are after close. Scrub the schedule to ensure there are no post-close squabbles over the 20-year-old computer.

7. You don’t document your procedures

Many business owners have of their “institutional knowledge” packed securely between their ears. The owner has been doing the business for so long, it is second nature.

The problem is that the owner will be “retiring” after their obligatory transition period. Creating documented standard operating procedures will give a prospective buyer comfort that you took the time to reduce your procedures to writing to ensure they have a reference when they run into problems in the business.

The mundane things need to be documented. The most prevalent things are business passwords to QuickBooks, etc.

Read the entire article at NNBW: https://www.nnbw.com/news/michael-bosma-8-mistakes-to-avoid-when-selling-your-business-voices/