If you’re seriously considering a sale or transfer of ownership of your business, then now’s the time to get your financials in order. Create a plan with these three things in mind:
Reducing risk and uncertainty
If you haven’t yet, now is the time to create a thorough credit assessment of your customer portfolio. Make sure your credit staff is using multiple business and consumer credit reports to evaluate customers’ credit quality and likelihood of default. Also, your company’s cash flow will also be a priority for new leadership – the buyers need to understand how much cash they’ll need to support operations after the sale. There are ways you can make improvements to your credit and collections now, that can improve your position when it's time to sell.
The value of your company includes hard assets like property, inventory and buildings, along with the quality of your balance sheet. Know what the financial red flags are that can impact your company’s valuation.
Fostering continuity can be an elusive but important aspect of any ownership transition. After all, a new owner will want to maintain many of the relationships and processes that have led to your success. Learn what processes you can put in place now to create stability and foster continuity before, during and after an ownership transition.
There’s a lot to think about when it comes to transitioning your business. Read the full article to learn how you can strengthen your company in these three areas.