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Selling Nj Business

Preparing to Sell Your New Jersey Business

Preparing to Sell Your New Jersey Business

Many small and mid-sized New Jersey business owners do not consider an exit strategy in the event that they retire.  An exit strategy ensures that the business can be sold for maximum value, or that it can be passed on to children and still function as a viable business.

What to Do

Clean up your numbers.  With small and mid-sized closely held New Jersey businesses, it can be challenging to determine what the owner is actually earning, or what is known as seller discretionary earnings. Seller discretionary earnings include not only salary and bonuses but also any personal expense that you are charging to the business that has no connection to the generation of revenue. Examples of this include personal restaurant meals, vacations, personal telephone expenses, and personal auto expenses. Brad Palmer of Crown Business Brokers recommends that you prepare financial statements that exclude all personal expenses and indicate true profit.

Replace the current accountant. Brad says you might want to consider replacing your current accountant with a “brand” name firm. Financial institutions have more respect for brand name accounting firms than for solo practitioners, although they will not admit this. This means that a prospective buyer will have an easier time obtaining financing if he or she presents financial statements to a bank where the loan officer is familiar with the accounting firm and respects it.

Cross-train employees:  This means that, within your organization, each key position should have an internal replacement. While this is often difficult for a very small business, it should always be a goal.

Replace yourself:  Can you take a six-week vacation and still be in business when you return? If your honest answer is no, then you really have a job and not a business. Brad Palmer says you should have someone trained who can easily step into your shoes.

Taxes:  Prior to placing the NJ business on the market, be sure that all tax returns have been filed and all tax payments are up to date. You do not want this to become an issue two days prior to closing.

Hiring a broker. You should give as much thought to hire a NJ broker as you would to hiring an attorney or CPA.  Many business people do not give much thought to this since the broker is only paid if a sale is consummated. A good broker will help you maximize the sale value of your business and saves considerable time as well as helps you to maintain confidentiality.

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Sell NJ Business

Sell NJ Business

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