What financial reports does a business broker need to sell a business?

When you're preparing to sell your business and engage a business broker, one of the first steps will be gathering key financial documents. These records give prospective buyers a clear picture of your business’s financial health—a critical factor in determining its value and attractiveness on the market.

Your broker will use this information to carry out a business valuation and help position your business competitively. Let’s explore the essential financial reports you’ll need, why they matter, and how they contribute to a smoother and more successful sale.

 Essential Financial Reports for Selling a Business

When selling a business, your broker will likely request the following documents to support the valuation process and develop a compelling sales package:

1. Company Accounts

Provide at least three years of company accounts, which typically include:

• Profit and Loss Statement

• Balance Sheet

• Cash Flow Statement

These reports give an overview of your business’s performance over time and are crucial for valuing your business and attracting serious buyers.

2. Cash Flow Forecast

This projection estimates how much cash your business expects to receive and spend in the future. It gives potential buyers insight into the financial outlook of your business and its expected liquidity.

3. Breakdown of Company Assets

List both tangible (equipment, property) and intangible assets (intellectual property, trademarks, investments). This helps buyers understand what they’d be acquiring and assess the business's overall value.

The Role of the Sales Memorandum

Your broker will use the financial and operational data you provide to create an Information Memorandum (IM)—also known as a sales memorandum or teaser document. This document is key to marketing your business and includes:

• Financial Overview – Profit and loss, balance sheet, and cash flow forecast

• Company Overview – Business model, location, staff structure, operating hours, growth potential, and reasons for sale

• Expression of Interest Details – How to register interest, timelines, and contact information

The IM presents your business professionally and gives buyers all the details needed to assess the opportunity.

Why Up-to-Date Accounting Records Matter

Keeping accurate and current financial records isn’t just good practice—it can significantly boost your chances of selling.

Here's why:

Demonstrate Growth Potential

Cash flow forecasts and steady revenue increases help illustrate that your business has room to grow—making it more appealing to buyers looking for long-term value.

Support Your Claims with Data

If your business has bounced back from challenges like COVID-19 or consistently hit performance targets, showing this in your financials builds credibility and buyer confidence.

Encourage Transparency

Accurate records create trust and open the door for honest conversations. This can be especially important when discussing dips in performance or external disruptions.

Streamline Due Diligence

Buyers will conduct due diligence to verify your claims and uncover any red flags. By presenting clear and complete records upfront, you reduce the risk of issues arising later in the process that could derail the sale.

Determine True Market Value

A reliable business valuation relies heavily on up-to-date financials. Without them, you may undervalue or overprice your business—both of which can harm your chances of a successful sale.

How Can CBS Business Sales Help You?

CBS specialise in helping business owners find the right buyer—whether you're retiring, moving on to a new venture, or simply looking to cash in on your hard work.

We take the stress out of the process by working closely with your accountant to gather the necessary financial records. Our experienced brokers will guide you from valuation to sale, ensuring a smooth, professional journey.

Get in touch with us today for a free consultation and take the first step toward selling your business with confidence.