You’re running a successful business and growing like there’s no tomorrow. Soon you’ll be able to sell this company and move on with the big money you’ll garner from the sale.
But it won’t be as much as you expect.
You see, during due diligence, things get uncovered. Due diligence is designed to uncover issues – both good and bad – that the buyer needs to know in order to determine a fair price. And if you have skeletons hiding in your numbers, like less-than-perfect accounting practices, your company’s value will decrease in the eyes of buyers.
The good news is that you can prevent these skeletons from piling up and having a detrimental impact on your company’s valuation. Here are three actions you can take now:
Get the accounting right.
If your books are a mess, then you need to upgrade to a bookkeeper who understands good accounting practices. No more messes or costly, unpleasant surprises.
Having a strong understanding of accounting principles can take you a long way in every stage of your business – whether you’re getting ready to sell or just communicating effectively.
Orienting yourself with the ins and outs of your business’ cash flow and its profit is a great way to start! You can find a good introduction to the concept here.
Get the right people on board.
You can’t ask your landscaper to re-wire your electrical panel. So, you shouldn’t ask your bookkeeper to design and analyze metrics and trends and plan your business’s financial results and exit strategy – basically, the sale of your business.
A consulting CFO can be your ticket to ensuring controlled and profitable growth add to your company’s valuation, as well as overall reliability and credibility of the financial statements.
Get the right tools in place.
You need planning tools to help guide your business. A budget, a strategic plan, a succession plan, an exit/transition plan – all of these tools can increase the profitability and value of your business.This stuff happens in real life, by the way. When I work with a new client, we’re in cleanup mode all the way through the onboarding process to move them away from their basic cash-in, cash-out bookkeeping methods and help them cultivate good accounting practices.
The goal is to enable you to grow your business, as well as paint a transparent and positive picture of your business’s value. This way, we make sure that no skeletons will pop out of your closet and scare away a potential buyer or supplier.
If you’re ready to dive in and supercharge the value of your business, give TurboExecs a call.