{"id":4598,"date":"2023-05-30T15:58:00","date_gmt":"2023-05-30T22:58:00","guid":{"rendered":"https:\/\/www.soundcu.com\/?p=4598"},"modified":"2025-10-21T14:22:46","modified_gmt":"2025-10-21T21:22:46","slug":"exiting-your-business-preparing-for-due-diligence-by-a-prospective-purchaser","status":"publish","type":"post","link":"https:\/\/www.soundcu.com\/blog\/exiting-your-business-preparing-for-due-diligence-by-a-prospective-purchaser\/","title":{"rendered":"Exiting Your Business: Preparing For Due Diligence by a Prospective Purchaser"},"content":{"rendered":"<div class=\"co-flex_row co-flex_row__blue co-flex_row__long-form-text co-flex_row__next_row__blog-contributors\" >\n\t<div class=\"co-flex_row--row co-row\">\n\t\t\t<div class=\"co-long_form\">\n\t\t\t\t\t<div class=\"co-long_form--block co-long_form--block__nomedia prow items-start \">\n\t\t\t\t<div class=\"co-long_form--text pcol-md:12\">\n\t\t\t\t\t<div class=\"co-long_form--content\"><h2>Exiting Your Business: Preparing For Due Diligence by a Prospective Purchaser<\/h2>\n<p>If you\u2019re planning to put your business on the market, getting it ready for sale beforehand is crucial to avoid scrambling to put things in order, when potential buyers are actually knocking on the door.<\/p>\n<p>Any buyer with business sense is going to do their due diligence before considering making an offer. That means they\u2019re going to have a checklist of things to scrutinize, questions they want to ask, and people they want to meet. Being prepared for this will not only ensure your business is more attractive to prospective buyers, but it means you\u2019re more likely to secure a better price by demonstrating you\u2019re prepared.<\/p>\n<p>&nbsp;<\/p>\n<h3>The Buyer\u2019s Perspective<\/h3>\n<p>When preparing to sell your business, it\u2019s a great idea to consider things from the buyer\u2019s point of view. In other words, what would you look for if you were the buyer? A common question a buyer might ask is your reason for selling. You should have an honest response that doesn\u2019t suggest the need for urgency.<\/p>\n<p>Buyers prefer low risk with high reward when they consider investing in small businesses, so they\u2019ll look for good cash flow and solid systems with the potential for further growth.<\/p>\n<p>Buyers will also want accurate and complete information to make an informed decision on whether your business is suitable for them. You can help this process by understanding who your potential buyer is and what they may want to know about your business.<\/p>\n<p>Likely information prospective buyers will want to see include:<\/p>\n<ul>\n<li>Your competitive advantages and unique selling points.<\/li>\n<li>How you&#8217;ve successfully handled the ups and downs of sales and cash flow, especially if yours is a seasonal business?<\/li>\n<li>What information around, leases, customer agreements, and intellectual property you own? When do they expire or require renewal?<\/li>\n<li>The planned smooth transition between owners.<\/li>\n<li>The levels of stock and investment required in the future.<\/li>\n<\/ul>\n<p>It\u2019s likely that potential buyers will want to view at least three years of financial statements, including income statements and balance sheets. They\u2019ll be buying into your business\u2019s future profitability, so explain any differences between what the finances are showing now, and what they could be showing in the future.<\/p>\n<p>Finally, buyers will be aware that there\u2019s a risk of customers leaving after you sell. You\u2019ll need to reassure them that your customers are loyal to the business rather than to you.<\/p>\n<p>&nbsp;<\/p>\n<h3>Time for a Makeover<\/h3>\n<p>In much the same way that you\u2019d spruce up your house before it goes on the market, give your business a makeover so that it\u2019s presented to its best possible advantage.<\/p>\n<p>This means tidy financial records, optimal levels of staff and inventory, and tightened control over debtors. Fixed assets (like equipment and vehicles) should be recent or at least not need replacing in the near future.<\/p>\n<p>&nbsp;<\/p>\n<h3>Increase Profits<\/h3>\n<p>If you can show an increase in profit is a current trend, you\u2019ll reassure a buyer that the business is growing. Go all out to increase sales, follow up leads, call in favors, and ask for referrals to drive sales. Identify what costs you can remove to increase your net profit. Can you buy materials cheaper, switch suppliers of overheads (such as energy and internet costs), or be more efficient with processes so you don\u2019t need as many staff or contractors?<\/p>\n<p>Talk to your staff and ensure they\u2019re making the most of techniques like up-selling and cross-selling. Review their performance so that customer satisfaction is optimal.<\/p>\n<p>Demonstrating how sharp your internal processes are will show buyers that your business is functioning efficiently and having sales records on hand to prove it is essential.<\/p>\n<p>&nbsp;<\/p>\n<h3>Summary<\/h3>\n<p>When you\u2019re getting your business ready for sale, don\u2019t forget the physical aspects as well. Update your signage and marketing material, so that you make a good first impression when buyers come to view your business. Your premises should be immaculate and orderly, with friendly staff and lively activity. New signage, repainting, and implementing a general clean desk policy will help the overall impression.<\/p>\n<p>Remember that, like any other aspect of business, planning, and preparation are key to success. When you\u2019re getting ready to sell, try as much as possible to keep the buyer\u2019s point of view in mind, and keep asking yourself \u2013 what would I be looking for if I were thinking of buying this business?<\/p>\n<p><a href=\"https:\/\/www.soundcu.com\/business\/loans\/\" class=\"co-button\">Explore Business Lending<\/a> <a href=\"https:\/\/www.soundcu.com\/business\/banking-with-sound\/\" class=\"co-button\">Explore Business Banking Services<\/a><\/p>\n<\/div>\t\t\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\n\t<\/div>\n<\/div>\n\n\n<div class=\"co-flex_row co-flex_row__last co-flex_row__blog-contributors\" >\n\t<div class=\"co-flex_row--row co-row\">\n\t\t\t<div class=\"co-blog_contributors\">\n\t\t\t\t\t<div class=\"co-blog_contributor\">\n\t\t\t\t<div class=\"co-blog_contributor--img_wrap\"><img loading=\"lazy\" decoding=\"async\" width=\"300\" height=\"300\" src=\"https:\/\/www.soundcu.com\/files\/WhiteClaire_scu-43_300x300.jpg\" class=\"co-blog_contributor--img\" alt=\"Claire White VP Business Banking Services\" srcset=\"https:\/\/www.soundcu.com\/files\/WhiteClaire_scu-43_300x300.jpg 300w, https:\/\/www.soundcu.com\/files\/WhiteClaire_scu-43_300x300-150x150.jpg 150w, https:\/\/www.soundcu.com\/files\/WhiteClaire_scu-43_300x300-75x75.jpg 75w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/div>\t\t\t\t<div class=\"co-blog_contributor--content\">\n\t\t\t\t\t<h3 class=\"co-blog_contributor--name\">Claire White<\/h3><div class=\"co-blog_contributor--title\">VP Business Deposit Services<\/div><div class=\"co-blog_contributor--bio text-component\"><p>Claire White is the Vice President of Business Deposit Services at Sound Credit Union. She leads a team of Business Services Officers and Specialists who work closely with local businesses to provide personalized support and smart banking solutions. Claire is a Certified Cannabis Banking Professional (CBP) and helps ensure Sound&#8217;s cannabis banking program meets the highest standards of compliance and care. She also oversees the credit union&#8217;s\u00a0treasury management program, helping business members access secure, efficient tools to manage their money with confidence. Claire is passionate about making business banking simple, accessible, and tailored to the unique needs of each member.<\/p>\n<\/div>\t\t\t\t\t\t<div class=\"co-blog_contributor--social\">\n\t\t\t\t\t\t\t<span>Connect<\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a href=\"http:\/\/linkedin.com\/in\/clairepwhite\" class=\"co-social_share--link\" target=\"_blank\" rel=\"noopener noreferrer\" aria-label=\"LinkedIn\">\n\t\t\t\t\t\t\t\t\t<svg class=\"icon-svg\" viewBox=\"0 0 24 24\" role=\"img\" aria-label=\"Icon LinkedIn\">\n\t\t\t\t\t\t\t\t\t\t<use xlink:href=\"https:\/\/www.soundcu.com\/wp-content\/themes\/soundcu-theme\/images\/sprite-icons.svg#linkedin\" \/>\n\t\t\t\t\t\t\t\t\t<\/svg>\n\t\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t\t<\/div>\n\n\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>In much the same way that you\u2019d spruce up your house before it goes on the market, give your business a makeover so that it\u2019s presented to its best possible advantage. <a href=\"https:\/\/www.soundcu.com\/blog\/exiting-your-business-preparing-for-due-diligence-by-a-prospective-purchaser\/\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":10,"featured_media":9663,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","_searchwp_excluded":"","footnotes":""},"categories":[49],"tags":[],"class_list":["post-4598","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-commercial"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/posts\/4598","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/comments?post=4598"}],"version-history":[{"count":2,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/posts\/4598\/revisions"}],"predecessor-version":[{"id":17253,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/posts\/4598\/revisions\/17253"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/media\/9663"}],"wp:attachment":[{"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/media?parent=4598"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/categories?post=4598"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/tags?post=4598"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}