Owners & Sellers
Increase the value of your business before you sell it.
For owners of businesses earning roughly $500K to $5M of EBITDA that still run through them. A buyer prices what the reviewer can see on the day the books open, and most of that can be changed in two years. Some of it takes two months. Where to start depends on how far out you are.
Where you are
Where you are decides where to start.
Five places owners find themselves, the constraint that usually goes with each, and the page to go to.
The usual constraint
“It runs through me” is the finding that moves the price.
Owners say it in those words. Pricing, purchasing and the three largest accounts route to one person, and nobody else has ever set a price or negotiated a vendor program. A buyer will ask what breaks in the first month without you, and will price the answer. The fix is a seat for someone else to hold and the time for them to hold it, because the proof a buyer accepts is repetition, which is why the structure takes two to five years and the books one to two.
Selling in the next year?
Inside a year, paperwork and pricing are what is left, and they still move the price.
Retention agreements on the people a buyer must keep, the equity understanding in writing, consents requested on the agreements that carry change-of-control clauses, and a price file recalibrated with a margin floor on quoted work. Not one of those needs a year, and all of them change what a buyer believes. A sell-side Quality of Earnings runs the buyer’s test first, so the add-backs and the working capital peg are defended before a buyer sets them.
If you want it run with you
Two seats run the list with you, from inside the business.
Most owners take the Review’s fix list and run it themselves, which is what it is written for. Owners who want it run with them put a CFO and an operating partner in the business every month, with the close by a set day, the 13-week cash view, the plan with three to five initiatives and the hires behind the seats, all re-scored every quarter against the five things a buyer prices. One seat or both. The Exit Readiness Partnership is that work pointed at a sale; the CFO & Operating Partner page sets out the seats.
Raising or borrowing
Lenders and investors decide on the package you hand them.
A model that ties to history, add-backs that survive a committee, a 13-week cash view and a file organized the way the money reads it. If you are raising equity or refinancing, that is Capital Readiness, and if you are selling the Review comes first, because a buyer’s lender will read the same package.
Get started
Find out where the business stands this quarter.
Take the free Foundation Check in about ten minutes, or book a call and tell us how far out you are. Either way you’ll know the one thing to fix first.