Stage 2 of 9

Getting the company ready

Preparation is unglamorous and it is where most of the outcome is decided. The work takes months, and every week of it removes a discount later.

Three groups of work

• Figures. Results that reconcile to bank statements, with private and one-off costs identified line by line.
• Ownership. Domains, trademarks, accounts and contracts registered in the name of the company rather than a person.
• Dependence. Written processes, a second person with access, and a second source for whatever carries most of the revenue.

What a buyer notices first

Not the design of the shop. The first questions are always about where the orders come from, how stable that has been, and what happens to it when the owner stops answering the phone.

A company that can answer those three questions with documents rather than assurances is in a different negotiating position from one that cannot.

The awkward items

Every business has two or three. Stock that has not moved in two years. A supplier arrangement that was never written down. A dispute that was left unresolved. None of them are fatal, and all of them are worse when discovered by the other side.

How long it takes

Six months is a realistic period for a small company with a willing owner. Two years is realistic where the business has to be rebuilt around someone else first. Neither can be shortened much once a buyer is already waiting.

Every question a buyer can answer from the file is a question that never becomes a negotiating point.