Think your thriving business with its ever-growing customer base and robust sales equals a big price tag when you go to sell?
The reality is what may be hiding in your numbers can actually devalue the business.
What’s hiding is usually brought to light in the due diligence process, when a buyer is interested in purchasing and is looking for any potential issues (good and bad) that will help them determine a fair price to offer.
So what is it that could threaten the value of your business?
Less-than-perfect accounting practices. And those practices result in statements that don’t properly reflect the true financial position of the company.
If you’re concerned that your current accounting practices may bring down the value of your business, here are three actions you need to take today.
- Clean Up Your Books
Messy books cost your business real money. An outsourced CFO can take a look and tell you if it’s time to upgrade to an accounting professional who understands good accounting practices. These practices can help you in every stage of your business – regardless of whether or not you’re preparing to sell.
- Hire the Right People for the Tasks
Your bookkeeper is an important part of your team to help keep your numbers in order, but you shouldn’t ask him to take on tasks that demand a deeper understanding of the metrics, trends, and financial results to help increase the value of your business. That’s better left to a professional who has the experience and expertise to help you plan for and profitably exit your business.
- Use the Right Tools for the Job
The right planning tools can help increase profitability and the value of your business when used properly. Tools such as a budget, a succession plan and an exit or transition plan are essential to guide your business in the right direction.
(By the way – we help our clients with all of these, all the time.)
Even if you’re not planning to exit your business in the next few years, having good accounting practices in place can provide you, and potential lenders or vendors, an accurate picture of the financial health of your business so that you can maximize the value of your business.
And if you need help with any of the steps above, reach out to us at TurboExecs.