Buying or selling a business requires an asset inventory

If you're planning to sell your business, do you know the value of your personal property? Without a complete, detailed list of all of your assets, the answer will be 'no'. Let’s say you have 10 tables, each costing $80. That’s $800, and most likely not listed on your depreciation schedule or any other document, for that matter. How many chairs, desks, lamps, etc., are owned by the business? To ensure that you are receiving a fair and equitable price for your business, compile a detailed list of all of your assets.

The same is true when purchasing a business. We asked a new business owner if she received an itemized inventory of its contents. Her response was, “No, I have no clue; I trust my business broker.” If you don’t know how many desks, tables, chairs, computers, printers, electronics, appliances (the list goes on and on, doesn't it?) you have, how will you know if you paid a fair price? An itemized inventory of the contents is a document you should require.

Most small-to-medium sized business owners agree it is important, but few have this documentation. Reasons cited are that they and their employees are too busy, it takes too long, they don’t know how, or realize they will not keep it up to date if they do create one.

If you are in one of these categories, seek the assistance of a professional to provide the service for you. Verify they are bonded and insured. In addition to the inventory service, the provider should also include secure back-up of your records and have a process in place to update your records annually.