We’re just a few weeks into spring and that means it’s time for spring cleaning, at home and at your Business. If regular housekeeping is done, both your home and business are always ready for those unexpected guests at home and transitioning of your business. What I mean is that it would make due diligence and the whole business sale process a lot smoother.
Tips & Tools
Update Financials: Messy numbers and casual accounting practices create headaches when it comes time to sell. Clean, industry-standard or audited financials, on the other hand, can actually increase a buyer’s offer.
Hopefully, you have a good relationship with your CPA. If not, due diligence can be painful for all involved. Answers trickle in piecemeal, responses drag out, and parties on both sides get frustrated.
‘Beautify’ Facility: Neatness matters. Buyers will always comment with pleasant surprise when a facility is clean and organized, with a logical place for equipment and inventory.
This goes for office teams too. If you have even one manager who hoards paperwork and lets things pile up, buyers will take notice.
Organize Digital Files: We brought on some new team members a while back and quickly realized our digital files needed some help. Each year, we review our file systems to make sure they are clean in order to make work more efficient for everyone.
One company has a digital spring-cleaning as a team. They spend an hour or so going over their file systems, agreeing on things that should be deleted, moved, or renamed.
Remove Extra Equipment: There’s just something about getting a good deal on equipment. However, if the equipment goes unused or becomes obsolete, then we have a problem when it’s time to sell. Unfortunately, we have had to inform owners that their $10 million in asset value was only worth $8 million on a cash flow basis.
Most business owners would rather maintain employee jobs and sell a going operation than sell off their assets one by one. We encourage owners to right-size their businesses or ensure that their equipment supports sales. Thus, some of the equipment is sent to an auction. That revenue, together with what we can get for the business, will get us closer to the seller’s goals. There no reason to keep excess equipment on the books in a sale.
So as you open up your windows this season, take some time to clean and organize. Declare a Spring Cleaning day and get the entire team involved. You’ll all be more productive and you’ll be better prepared when it comes time to sell. Buyers will take note and reward these efforts.