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March 2, 2016

Five Steps to Selling Your Business: Step 2 – Organize Your Financials

One of the first items a potential buyer for a business will want to talk about is the organization’s financial performance. Dave Enick, Tampa Bay Managing Director, co-authored an article discussing step two of a five step process to selling your business. This step covers collecting, organizing and examining a company’s financial indicators in preparation for the due diligence phase of the sale process.

A professional financial picture makes your business much more attractive to buyers. A special focus should be on documented, clearly understood, and applied historical accounting reporting policies and procedures in the business. Sellers should be prepared to present monthly trial balance or similar financial information prepared in accordance with GAAP. A key area of focus will be a reconciliation of revenue and sales reports to the financial statements.

It is important to analyze this data over at least a few years to pinpoint patterns in spending or expenses.  The historical cash flow projections will help with present and future cash flow projections.

Additionally, it is important to consider add-backs, marketplace considerations, and the way your organization is structured.

For more information about the five step process and organizing your financials, contact Dave Enick at denick@cbiz.com or 727.572.1400.

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