Things you need to know before selling your Business

There are several factors that are needed to be considered when one is thinking of selling their business to other parties. Before considering everything the first thing one must do is evaluate their business accordingly. This is the process of due diligence where research and analysis are initiated before an acquisition, investment, business partnership or bank loan, in order to determine the current value of the business.

Due Diligence might be considered as an audit for the business to confirm all the facts that are included in the financial statements of the business that is being evaluated. The due diligence process consists of the following:

• Analyzing the total value of the business: A business total value can indicate the total stock price of the business, how broad the ownership might be, and the potential size of the company's target markets.

• Revenue & Profits: The income statements of the business must also be thoroughly analyzed so that the net income, net profit, business’s revenue, operating expenses, return on equity are calculated and the business bottom line is also analyzed.

• Competitors & Industries: The major competitors for the business must also be analyzed and found so that the one who is evaluating the business can get a clear view of where their business stands on the current market when compared with the businesses in the same industry.

• Business Management & Ownership: The Directors, owners, and management team of the business must be stated clearly in the due diligence. The number of shares owners by all the shareholders must also be clearly stated accordingly.

• Business Balance Sheet: The balance sheet of the company can shed light clearly on what’s happening in the company in every financial year. They contain most of the information like business assets, business financials, business board meetings and decisions, total liabilities, stockholder’s equity, etc.

• Stock Price History if available: The business owners must also mention about the stocks of the company if it's available in the due diligence process. They must also include the short-term and long-term price movement of the stock and whether the stock has been volatile or steady.

• Risks involved in the Business: There’s a statement ‘Every business involves risk’. Likewise, business owners must also understand all the industry-wide risks and company-specific risks that exist.

• Business Valuations: The final valuations of the company is done with the corresponding valuation method that is suitable for the business.

Scrutinysoft offers the due diligence process for all types of industries across various sectors. We do due diligence for mergers, acquisitions, startup investments, Investments and researching hedge funds.