Someday, perhaps we’ll no longer need hard copies of official documents for legal purposes, but for now, you still have a lot of paperwork to get in order before you put your transportation business up for sale. The following documents are the most important ones you’ll need to secure in order to ensure a successful business sale.
Also called a selling memorandum or a COM (confidential offering memorandum), this document works to inform potential investors about your transportation business without specifically identifying you or your company. This document aims to intrigue buyers while giving them enough information to give them an idea of the kind of situation your business is in. The goal is to leave them wanting more, in which case a non-disclosure or confidentiality agreement will be key.
This is key to protecting your company’s anonymity as you communicate with prospective buyers. It’s important because if your intention to sell your business leaks to your employees or customers prematurely, it could negatively impact your business’s stability and value. A leak to competitors could prove devastating, as well, if sensitive details become known. A non-disclosure agreement can be signed as part of a screening process to ensure that only serious, qualified prospective buyers gain access to your company’s specific information.
Potential buyers will want to see the data behind your transportation business valuation. Financials include tax returns, balance sheets, audit statements, and P&L statements. At least three years’ worth of relevant documentation should be organized and accessible, preferably by an accountant that specializes in transaction preparation. Such an accountant should be proficient in recasting your financials in order to add discretionary income back into the picture, in order to demonstrate a more accurate picture of what a buyer stands to inherit.
Sometimes, buyers are strategically interested in various benefits offered by your existing customer base or experienced staff. You’ll need to be ready to provide access to all standing contracts with employees, customers, and suppliers.
When the time comes for a sale, you’ll want to have a purchase agreement drafted to include the particular assets that will be transferred from you to the new transportation business owner. Other details of the transfer will be included in this document as well, providing a sort of detailed receipt for the business sale.
As you draft and collect the above-listed documents in preparation for your transportation business sale, the transportation business brokers at The Tenney Group (link to website) can help guide you through each step toward a sale. Our experience within the transportation industry can help give you a unique edge on the competition and target your ideal buyer, making sure all your paperwork is in order before contact is made.
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