No you do not. You just won’t earn top-dollar in the end. It’s often said that the devil’s in the details. The same is true for your business. As buyers run a fine-toothed comb through your business, they look for signs of distress, weakness, or disorganization in order to discount the final sale as much as possible. (Read our Top 4 Pitfalls to Avoid.) Part of our 5-Phase, Reach your PEAK system ensures your business has a bulletproof shine so buyers feel comfortable paying top-dollar.

Have you ever been shopping for a new grill? So many to choose from, so many styles, tensile strength, wood versus propane, steel versus ceramic, portable or built-in, smoker or not. It’s confusing, not to mention the instructions to build. Imagine if you have a lot of cash and want to buy the best. You’d want a knowledgeable salesperson, a reputable brand, value for your money, easy-to-assemble instructions and a lifetime warranty. Not to mention that warm-fuzzy feeling of being the man with the plan, grilling fork in hand as you make the best steaks your friends have ever eaten. It’s the same thing with buying a business. If the books are on a cash-basis and “iffy” at best, you don’t get a warm feeling as a buyer. If there are no financial management reporting mechanisms, budget to actual comparisons, key performance indicators, 3-year projections, forecasts and more, it makes it tough for the buyer to get comfortable that what you say they’re buying is reality. Has your company really recorded $10m in sales? Are your gross margins really at 65%? Are your assets and liabilities properly recorded? All of these are important considerations that the buyer requires to decide whether to buy you, or your competitor down the street. Remember – perception is reality, and in this case, a deal-breaker.

Remember the old saying, “cash is king.” It really is, and many a business has failed with sales going through the roof because they do not have a handle on receivable collections, pay their vendors too fast, are too much in debt and more. It’s a vicious cycle, and as a business owner, it’s vital you understand the inflows and outflows of cash out over a 13-week period, comparing that to a 6-week run of actual cash flow. Graphing the inflows and outflows shows you when you’ll have dips in cash that require extending, or using, your line of credit and helps you manage the payments to vendors and collecting on credit your receivables in a timely manner. It’s called a cash flow forecast, and buyers love to see that companies are making business decisions with cash in mind. It’s a culture shift and a mindset that every dollar counts, and bleeding cash is a deal killer in most buyer’s minds.