Selling a business might be a CEO’s end-game, a forced necessity, or an opportunity presented unexpectedly, yet proper forethought and preparation is just as crucial here as it is in day-to-day operations. Selling your business is always emotional, but it doesn’t have to be overwhelming. Most companies won’t find themselves ready, and they will encounter negotiation points they are unequipped to vie for, resulting in an unnecessarily lowered selling price. Don’t allow someone else to undervalue your company.Although it might sound difficult, it is possible to be fully prepared for a sale. Foresight CFO just helped one of our clients successfully market their service company in a strategic sale, closing at 21 times EBITDA earnings when the normal multiple is 3.5 to 6.1, after being in business just four years. In this particular case, the buyer was looking for a dynamic, fast moving cloud computing company to help their balance sheet and infuse new energy into their offerings. Competition is rife in the data market. With many companies to survey and choose, from lack of preparedness could have lead to a missed opportunity for our client.

We manage our customers to be “due-diligence ready.” Whether the buyer asks for a copy of signed contracts for the last 5 years, wants to know which of your leases are capital or operating, or desires to discuss your inventory turns, our methodologies make sure the information is readily available. A thorough review of your books is part of any diligent M&A process, and clean, well thought-out reports and records will lower stress significantly.

Expediting the sale process is incentive enough to become ‘Due-Diligence Ready’, but comprehensive reports can also translate into leveraging power during negotiations. Simply put: good books strengthen your position, and buyer confidence is a significant factor in that position.