Continuing from the last post … this item in the checklist educates the buyer about the intangible inherent in the business being sold, raising the perceived value to the acquirer, and communicates to the buyer that the business is well organized and easily transferable. Intangibles include among others, name recognition, market niche, vendor relationships, operation and production systems, distribution channels, customer loyalty and trained and skilled employees.

Financial and Business Forecasts are often necessary when the business to be sold is a start-up or has little operating history to enable the buyer to formulate a business plan and justify growth and expansion of the business in the future.

Following are the things that should be included under Financial and Business Forecasts:

1. Pro forma financial statements for the next three (3) years
2. Planned new products or services
3. Potential new business markets and any supporting documentation
4. A description of any emerging new technology to be exploited

These points if covered in the checklist provide the buyer guidance and support the multiple upon which the the selling price is based.

Quantum™ Business Solutions Network, offers guidance at every step of a sale process.

Keep visiting Quantum™ Blog for more information on business sale and purchase transactions.

This entry was posted on Saturday, January 26th, 2008 at 3:46 pm and is filed under Selling a business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.