Preparing Additional Documents

Below is a list of additional documents you should organize into a virtual data room before putting your business on the market. While most of these documents won’t be requested until due diligence, you should begin preparing these the moment you decide to sell. Having an organized physical or electronic file of all of these documents will put you at a significant advantage and speed up the sale process. It will also reduce the perceived risk to the buyer since buyers view purchasing an organized business as less risky than purchasing a disorganized business.

• Operations
  • Marketing: Marketing material and collateral.
• Third-Party Contracts
  • Premises Lease: Print and have on file the details of the lease for your premises.
  • Supplier and Vendor Contracts: Print all major supplier and vendor agreements.
  • Advertising Contracts: Print all key advertising agreements.
  • Insurance Policies: Print all key insurance policies, such as liability, auto, health, and workers’ compensation.
• Assets
  • Asset List: Compile a complete list of all tangible assets included in the sale.
  • Equipment Leases: Print a copy of all major equipment leases.
  • Inventory List: Print a detailed schedule of all inventory included in the sale. 
• Financial Statements
  • Profit and Loss Statements: Have on hand a copy of the last three years’ P&L statements. This should include a breakdown of revenue by product or service and customer type, and a breakdown of sales by month for the previous three to five years.
  • Adjustments: Provide documentation for all adjustments or add-backs to your financial statements. 
  • Full Accounting: Prepare a general ledger or detailed list of all transactions and expenses or a full accounting file.
  • Financial Budgets and Projections: Prepare a projection, and keep it updated if it’s available.
• Financial/Other
  • Bank Statements: Compile a copy of bank statements for the previous three years. The bank statements should match your P&L statements and federal income tax returns.
  • Merchant Statements: Compile a copy of merchant account statements from your credit card processor for the previous two to three years.
  • Accounts Receivable and Payable Schedule: Print a current accounts receivable and payable schedule and make sure it’s up to date.
• Tax
  • Tax Returns: Have on hand a copy of federal income tax returns for the previous three years. Ensure they match your P&L statements or ask your accountant to prepare a reconciliation to ensure any differences can be explained.
  • Sales Tax: Compile sales tax reports for the previous three years.
  • Annual Personal Property Tax Certificate: Create a copy of your annual personal property tax certificate, which will be prorated at closing.
• Staff
  • Staff Schedule: Compile a schedule of owners, officers, employees (with names redacted), independent contractors, consultants and their titles, compensation, job descriptions, benefits, length of service, turnover, and compensation benefits.
  • Agreements: Compile all employment, agency, and independent contractor agreements and other employment-related agreements.
• Legal
  • Entity: Compile your articles of incorporation/organization, bylaws/operating agreements, minutes, and a certificate of good standing from the secretary of state.
  • Licenses and Permits: Copies of licenses, permits, certificates, and registrations from all governmental authorities. These may include a resale permit, business license, and other government documents.
  • Fictitious Business Name Statement (FBNS): FBNS or doing business as (DBA) certificate.
• Technology
  • Website: Ensure your business website is up to date and accurate and has the ownership information to enable you to transfer ownership.
  • Web Hosting: Print and have on file a list of all web hosting agreements and documentation.
  • Key Metrics: Compile information regarding customer acquisition and retention.