Are your financials exit-ready?

We’re not business valuators, but we spend a lot of time thinking about business value.

And what we do is educate our clients on how businesses are valued and what is within their control.

Often, a business owner thinks their financials are in order because they have a bookkeeper. Taxes are getting taken care of and bills are getting paid, so everything should be looking good, right?

But how’s the Balance Sheet? How’s the Profit & Loss Statement? What‘s your Net Income?

If those aren’t in place, or aren’t in order, it may have a real effect on your valuation. Because a buyer is going to go straight there when they think about your value. 

And if you can’t prove that those financials are correct, you might end up on the lower side.

We talk about looking at the business through a buyer’s eyes.

How much risk is in the business for the buyer? Are the systems in place? What are they taking on in the purchase, and how might that change what they’re willing to pay?

Sloppy financials might not sink a sale, but it may make the business less attractive. As we’ve written about before, in our experience a common reason deals fall apart is seller hesitation. 

And part of that might be because they realized they weren’t getting the deal they wanted, or it wasn’t enough for them to live the life they thought their business was affording them.

That’s why exit planning is a business strategy, not a thing to start doing six months out from an exit.

It’s something you can be working on years out, when you have enough time to get your financials in order so the business is attractive and less risky for a buyer to take on.

So, do you want to take the time now, and over the next couple of years, to improve the business and its attractiveness?

Let’s talk about it.

-Jason

Book a JobWalk with me and we can start the conversation.

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HFM Investment Advisors, LLC is a registered investment adviser. All statements and opinions expressed are based upon information considered reliable although it should not be relied upon as such. Any statements or opinions are subject to change without notice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. All investments involve risk and are not guaranteed. Information expressed does not take into account your specific situation or objectives and is not intended as a recommendation appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal, or investment advisor to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance.