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10 Ways to Make Your Business More Valuable - Part 2

Are you preparing your company for a future sale? Don’t miss the second half of our 10 Ways to Make Your Business More Valuable as well as a checklist to help you get started. 

6. Compliance

This is often the most neglected area of business because it covers a very broad area and, frankly, is a mundane part of the business for most companies.  Compliance can include government reporting, personnel documentation, proper insurance coverage, and required regulatory reporting, all of which vary based on industry.

If you have a factory, buyers will want to see proof that you have captured and reported all OSHA & EPA information. Emissions reporting, violations, and resolution are important records to maintain.  Within the factory or facilities, employee safety training is also an important compliance requirement.  Buyers will want to know if you use a third party for employee safety training, how often the training occurs, and that you have documented every class with attendance and topics presented.

If you own mechanical assets (equipment), buyers will want to see a current asset listing along with detailed maintenance records for each piece of equipment.

Additionally, most jurisdictions have business reporting for sales and use taxes, employment, etc. Be sure that you have complete and accurate records. If you have gaps (or late filings) the time to fix them is now, not during due diligence when a buyer is making valuation and risk determinations that could impact your deal.

Investors or buyers will want to see everything so they can identify gaps that might present risk.  Be sure to document compliance so you don’t give a buyer an excuse for a lower valuation by having missing or incomplete reporting and documentation.

7. Legal Review

The legal review will touch on all parts of the business. All contracts will need to be disclosed and reviewed.  

Examples might include:

  • Articles of Incorporation
  • Shareholder ownership and agreements
  • Board meeting minutes and motions
  • Employment agreements
  • Supplier and vendor agreements
  • Leases

Oftentimes, we’ll see a change of control provisions in supplier/customer contracts or shareholder personal guarantees on bank credit lines or leases. While seemingly simple, these provisions can take time to work out and most likely will hold up closing until adequately resolved. Any work that you can do in advance to prepare for these provisions will help to facilitate the closing.

For company-owned property, you’ll need to make sure all of the real estate specifics are in proper order, clearly presented and contingent issues resolved. Depending upon your business, an environmental review (Phase 1 or 2) may be required to document the environmental condition and that any past issues have been properly remediated and documented by a qualified third party along with any required regulatory entity completion inspection certificate or report.

As noted above, all employee-related documents will require legal review.  Documents that relate to confidentiality, non-competes, employment agreements (written and oral), and others, all have to be reviewed and eventually disclosed.

If changes need to be made or missing pieces must be located or completed, the time to review this is now, before you begin the sale process.

8. Intellectual Property and Patent Review

Critical to selling your business is making sure that you own everything related to the business. We suggest a thorough exploration of all patents, filings, uses, acquired products/patents, and employee intellectual property releases. We strongly encourage that you never assume anything related to intellectual property rights and uses.  Everything should be clearly documented, spelled out, and agreed to in writing.

Also critical will be releases and acknowledgment from contractors/suppliers that they have been compensated for their work and that the company owns the rights to the intellectual property developed with them on the company’s behalf.

Don’t forget that resolving these issues will be important for you but possibly not so important to the other parties involved and requests for resolution may drag out over time. Leaving these crucial areas to review during due diligence can create roadblocks and cost valuable time not to mention the chance of crippling an otherwise successful transaction.

9. Information Technology/Software/Cyber Security

IT systems come under increased scrutiny during buyer review. Not only is it imperative that your systems are functional and up to date, but you must also demonstrate that you own the software you are using (yes, companies do “borrow” software) and that your systems are secure.

Often times the company’s IT will be interfacing with outside partners or affiliated companies. Any gaps and past/proven unauthorized access or intrusions can present cyber risks to a transaction.

Similar to a financial audit, the third-party IT audit makes good business sense and proves a solid information technology foundation for growth. 

10. Strategic & Financial Plan

If you remember one thing from this list, this is the most important one to remember.  When we market a business, we are selling the future.

You must always remember that buyers/investors are looking for a foundation for growth. Our job is to identify growth opportunities and present your business as it could reasonably be developed over the coming three years.

It is critical to think about these growth opportunities in a comprehensive manner. These opportunities should then be incorporated into your company’s three-year financial plan, along with their reasonable assumptions.  

You should also identify additional growth opportunities that could be developed with incremental investment at the buyer’s discretion. For example, maybe you can expand to new geographies or add products/services under development or even acquire a competitor.

We don’t typically include these additional growth opportunities in the forecast, but we can quantify their impact separately to help buyers understand the additional value to be unlocked from owning the company during the next phase of growth.


Our ten-item list supports a solid foundation for growth which is essential for a successful sale. Your proven management team running a diversified business with accurate and timely financial and operational reporting is very attractive to experienced business buyers.  These factors can work together to showcase additional value to your business. Taking a $35mm company to $100mm is incredibly rewarding for you, your employees, and everyone involved with the business.

Use our checklist and see where you stand. Contact us to explore any additional areas that may be unique to your company. We look forward to helping you get ready for, and managing to, a successful transaction!

10 Ways to Make Your Business More Valuable Checklist


Item Number

Focus Area

What You Need

Important Documents


Financial Performance

  • At least $15 million in annual revenue
  • At least 2.5 million in EBITDA
  • Profit & Loss Statements for last 3 years.
  • Balance Sheet for last 3 years.
  • Cash Flow Statements for last 3 years.


Management Team

  • Proven team that can “almost” run the business without you.
  • Organization chart.
  • Resumes/bios for senior leadership team members.
  • Non-compete agreements.
  • Confidentiality agreements.


Audited Financials

  • Audited financial documents created by a CPA.
  • Item #1 above.
  • CPA sign off or, at very least, a Quality of Earnings Study.


Financial & Operating Reporting Processes

  • Consistent documentation that highlights your business performance.
  • Sales reports
  • Production reports
  • AR/AP reports
  • Inventory reports
  • Marketing metrics reports.


Diversified Revenue Streams

  • Documentation showing that your company is not overly dependent on one large customer or one single product.
  • Monthly sales by customer, by product
  • Customer sales analysis reports



  • Documentation showing that your company complies by the appropriate regulations for your industry.
  • Employee training records
  • OSHA records
  • Material Safety Data Sheets
  • Environmental reporting
  • Insurance certificates
  • Equipment lists with maintenance records.


Legal Review

  • Copies of all legal documents created or received by your company.
  • Articles of Incorporation
  • Shareholder ownership agreements
  • Board meeting minutes and motions
  • Supplier and vendor agreements
  • Lease agreements
  • Employee agreements.
  • Any other contracts signed on behalf of the company.


Intellectual Property

  • Documentation of ownership for all intellectual property and patents.
  • List of patents, or filings pending.
  • List of registered trademarks and service marks, or filings pending
  • List of all copyrighted materials with examples.
  • Website and domain name ownership.
  • Employee and contractor or supplier releases.


IT/Software/Cyber Security

  • Documentation that the software you are using to manage your business is properly owned or licensed and secure.
  • Software ownership
  • List of IT equipment
  • Security certifications
  • 3rd Party IT Audit


Strategic & Financial Plan

  • Documentation that you have a plan for future growth
  • Strategic plan
  • Marketing plan
  • Growth opportunities




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