Cleaning up financial reports and SOPs before sale

It's no secret that many businesses, both online and offline, are not in the best shape when it comes to their financial reports. This is often because the owners have been too busy running the business to keep track of the finances or they simply don't know how to read and interpret financial statements. In either case, this can spell trouble when it comes time to sell the business.

Hopefully, you were diligent with keeping your financial reports up-to-date from the very start. (If not, the first step in cleaning up your financial reports is to get organized. This means creating a system for tracking income and expenses, as well as categorizing them so that you can see where all of your money is going. You may want to consider hiring an accountant or bookkeeper to help you with this process.)

Once you have a good handle on your finances, it's time to start cleaning up the reports themselves. This means making sure that all of the numbers are accurate and that there are no errors. If you find any discrepancies, be sure to fix them right away. Once your financial reports are in order, you'll need to provide potential buyers with proof of your income and expenses. The best way to do this is to create a profit and loss statement. This will show potential buyers exactly how much money you're making and where all of your expenses are going. If you're selling an online business, it's also important to provide potential buyers with access to your customer database. This way, they can see firsthand how well your business is doing and get a feel for your customer base. Finally, don't forget to include a detailed business plan with your financial reports. This will give potential buyers a clear idea of your goals and how you plan on achieving them.

Creating a well-organized and complete financial picture of your business is going to take time, however, you're much more likely to attract serious buyers who are willing to pay top dollar for your company. While you may not necessarily need every single item in the list below for every type of online business, there is a range of information you can pass on to the buyer to ensure a smooth hand-over:

• Business Valuation Report Financial Statements for the past 3 years

• Tax Returns for the past 3 years

• List of Assets and Liabilities

• Accounts Receivable and Accounts Payable Reports

• Sales and Expense Reports for the past 3 years

• Profit and Loss Statement for the past 3 years

• Cash Flow Statement for the past 3 years

• Marketing Plan

• Web Traffic Report

• Due diligence report (if applicable)

• Appraisal report (if applicable)

• Business Brokerage Opinion of Value (OBV)

• Letter of Intent (LOI)

• Purchase Agreement Operating Agreement Franchise Disclosure Document (FDD)

• Transition Plan Employee Manual

• Owner’s Manual/Instruction Booklet

• Vendors and Suppliers Contracts Insurance Policies

• W9 Forms (for US-based businesses)

• 1099 Forms (for US-based businesses)

• Patents, Trademarks, Copyrights, and Other Intellectual Property Documentation

• Franchise Agreements

• Partnership Agreements

• Stock Purchase Agreements

• Bylaws & Articles of Incorporation/Organization

• Licenses & Permits

• Business Financing Documents

• Vendor Lists

• Customer Lists

• Social Media Accounts

• Website Domain Names

• Email Accounts

• Other Online Accounts

• Passwords & User IDs Sales Reports

• Traffic Reports

• SEO Rankings

• Google Analytics Data

• PPC Campaign

• Data Webmaster Tools

• A/B Testing Results

• Competitor Analysis

• Industry Research & Trends Report

• Advertising Materials

• Marketing Collateral

• Promotional Items

• Brand Assets

  Naturally, the higher the asking price of your business, the more of the items above will be required by the buyer, because each of these shines a light onto a different aspect of the business and helps complete their idea of what they are planning on buying.