top of page

Preparing the Balance Sheet for a Sale 

The end of the financial year provides an important opportunity to prepare your balance sheet strategically, especially if you are contemplating selling your business in the upcoming financial year. At Deal Leaders International (DLI), we understand the importance of presenting a balance sheet that reflects the true value of your business and appeals to potential buyers. This article offers tips on preparing your balance sheet and budget for an impending sale. 


  1. Review and Organise Financial Statements  Begin by thoroughly reviewing your financial statements for the current fiscal year. Ensure accuracy and consistency in all financial documentation. Organise your records, including income statements, cash flow statements and balance sheets. A well-organised financial history gives potential buyers a clear picture of your business's financial health. 

  2. Assess and Optimise Assets and Liabilities  Evaluate your assets and liabilities to determine their current market value. Identify any under-utilised or non-performing assets that can be divested or repurposed to enhance the overall value of your business. Simultaneously, address outstanding liabilities to present a more appealing financial position to potential buyers. 

  3. Strategic Cash Management: Less is More  Carefully manage your cash reserves, avoiding the accumulation of excessive funds. While it may seem prudent to have a healthy cash reserve, from a buyer’s perspective, it might raise questions about the efficiency of your business operations. To optimise tax implications, we have seen some clients creating an investment holding company, known as a Section 42 asset-for-share-transaction. This strategic move allows you to defer tax payments, potentially resulting in significant savings*. 

  4. Strategic Timing: The Power of Projections  Timing is a critical factor when preparing for a business sale. Selling your business close to the release of financial statements provides the most accurate and up-to-date information for potential buyers. This transparency builds trust and confidence in your business. Going to market in the first half of the financial year, up to August, also positions your business optimally, allowing buyers to focus on future potential rather than historical performance. 

  5. Tax Planning for the Upcoming Year  February is also an opportune time for tax planning for the upcoming fiscal year. Explore tax-efficient strategies to minimise your tax liabilities. Consult with your financial advisor or tax specialists to ensure your tax planning aligns with your business goals and potential sale. 

  6. Align Budget Projections with Sale Goals  When preparing your budget for the upcoming financial year, align your projections with the goals you have for selling your business. Clearly outline your revenue expectations, cost management strategies and any investments necessary to enhance the business's appeal to potential buyers. This proactive approach demonstrates foresight and positions your business as a well-managed and forward-thinking opportunity. 


Preparing your balance sheet for a successful business sale requires a comprehensive and strategic approach. By managing cash prudently, exploring tax-efficient options, carefully timing your market entry and staying informed about potential tax implications, you position your business as an attractive investment.  


*This does not constitute financial advice. Financial decisions require careful consideration and consultation with a qualified financial advisor. Deal Leaders International recommends seeking professional advice to navigate the complexities of tax planning effectively. 


bottom of page