Like the Boy Scout motto says: Be Prepared!

What every firm should have available when presenting their business for sale.

The following is not a comprehensive list but certainly has the major items that prospective buyers will request when considering the purchase of a firm.

  • History and brief description of the firm
  • Description of the facility with amenities, square footage, and number of offices; if leased, describe the terms and if transferable; if owned, state whether a lease or sale is available and a price for each
  • Description, age, condition of all the equipment
  • Employee list, including brief descriptions of their education, certifications/licenses, experience, capabilities, responsibilities, compensation, employee benefits, years with the firm, billing rates, realization rates, annual hours worked, annual hours billed; this includes part-time, full time, seasonal employees and subcontractors
  • An estimate of the seller’s discretionary earnings (“SDE” a/k/a owner benefit) of the firm
  • Copies of the last three years’ tax returns
  • Copies of the profit and loss (P & L) statements for the past three years and the current year-to-date; monthly P & Ls for the same time periods would be helpful in following cash flow
  • Firms statistics such as number of tax returns prepared, audits performed, consulting services, monthly/quarterly/annual write-up/bookkeeping clients along with respective annual receipts and annual hours related to each service
  • Tax, accounting, and other operational software used in the practice and transfer ability of related licensing

Such organization of data gives a positive impression and enhances the value of the firm.