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Selling a Business? Open the Books

Aug 18, 2016 | General

Selling a Business ? Open the Books“Everyone lives by selling something.” – Robert Louis Stevenson

On Tuesday, we looked at the idea of a purchase or acquisition from the buyer’s point of view. Today, we’ll provide a snapshot from the seller’s POV.

One item of major importance was the seller’s tax returns. If a seller refuses to show ‘em, then I’d advise both parties to cease negotiations and look elsewhere. Though there’s no legal requirement for you as a seller to reveal your corporate tax returns, there’s no way on earth that the buyer’s attorney would advise that he/she proceed without seeing them.

The request for tax returns is an early, key step in the sales process. Your tax returns will be a window into the business — whether you’re presenting it or being vetted for it. The truth about sellers is that they want to capitalize on the company’s actual numbers, and not what’s on the tax returns.

Keeping It Realistic

If you ever want to consider selling, there are some things you can do from the outset to keep numbers from inflating. One of the most important actions is to make sure what the business pays for is actually essential to the business.

A small marketing firm needs computers, paper, printers, and so on. No matter how progressive it might be, the owner shouldn’t be buying dumbbells and weights with the company card, for example. It’s that simple. You want to sell for as high as possible, but when the buyers do their due diligence, they’ll look for those sorts of expenses and call you on your B.S.

Building Off Conflict

There are embellishments on every tax return. If you understand that principle and can accept that the buyer assumes you’re “embellishing,” you will be in the proper mindset to sell.

Buyers will conduct their due diligence, and you should, too. Research them to learn if they have a history of running companies into the ground — you might not want to jeopardize your employees, longstanding clients and all your hard work and reputation just to make the sale. This is the conflict that fuels and kills sales. It’s a natural part of negotiations and can reveal a lot about both sides.

Most times, a seller calls me when they’re ready to put their companies on the market. However, Contact Brinen & Associates if you are considering selling your small business.


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I formerly worked as a satellite employee from my home state of New Jersey. I ended my employment with my former employer in 2016. In 2018, I was sued by my former employer for $1.1 million in Illinois State Court. I was referred to Brinen & Associates, LLC by a friend who is a client of the firm. Brinen & Associates, LLC came highly recommended. I contacted Joshua Brinen and then had a consultation at his office with his colleague Mark White. Together, Messrs. Brinen and White explained my options...

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