Sharing Financial Information With Your Business Broker

Sharing Financial Information With Your Business Broker

Preparing to sell your business can be a stressful time for many. Thinking about the return you hope to receive from the sale, the plans you have for retirement, or a new career - it can all be a little too much. But using a business broker is a great way to relieve the stress of the process when figuring out how to sell your business, and will ensure you can receive a good return on investment, and keep the process confidential.


To begin, following the execution of a marketing agreement, the seller will need to share a number of financial documents so their business broker can gain a baseline understanding of their small business and develop a price opinion to answer the question how much is a business worth.


As small business owner’s ourselves we understand there may be some apprehension surrounding sharing financial information about your business. But to calm your nerves, at the start of the process, Transworld signs a confidentiality agreement before reviewing any of your documentation. This measure further protects your information and, hopefully, will bring you some peace of mind! Confidentiality is a key aspect of our service offerings and we don’t take it lightly.


Once the relationship has begun, your business broker will need access to your total sales and earnings from the prior year or year-to-date, the past three years profit and loss statements, and the prior three years tax returns. This information will be used to develop a listing price, the seller’s discretionary earnings, as well as a financial recast of the business. Financial recasting is the accepted accounting practice of adjusting financial statements to address any items unrelated to the ongoing business. Once the business is marketed, the financial recast will be used to show the general finances of the business prior to having access to full business information during due diligence, and only after a buyer has signed a non-disclosure agreement. Sharing your financial information will also help your business broker seek lender pre-approval of your small business, which can be attractive to buyers ready to make an acquisition.


Confidentiality is built into our processes every step of the way from signing our own confidentiality agreements as your business broker to pre-qualifying buyers prior to sending them non-disclosure agreements. Confidentiality is also a key aspect of how to sell a business effectively.


To learn more about the business sale process, the information required to list a business for sale, and how we manage confidentiality, we invite you to visit our website or schedule a free consultation with an experienced broker.


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Rachael Holstein has been the Marketing Manager for Transworld - Rocky Mountain since 2016. Her work experience has been largely focused on business development and marketing in business brokerage, finance, architecture, property management, and information technology. A long time resident of Cleveland, Ohio, she attained her undergrad from John Carroll University and her Master’s Degree from Cleveland State University. In 2013, she relocated to Denver with her husband, Joe, and her furry companions to explore the mile high lifestyle!


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