Businesses that are considering a sale or capital raise are often unprepared for the strenuous and time-demanding process.
From the moment a business owner decides to sell or raise capital, the clock starts ticking to find the right advisors and gather the necessary operations data (accounting, tax, HR, operations, etc.).
In the end, potential buyers and lenders will not pay a premium price or lend capital to your company without seeing clean books and accurate financial reports. Mishandled accounts, inaccurate financial reports, and lack of financial organization will negatively impact your business’ valuation.
To avoid these common pitfalls, companies should engage an advisor that specializes in transaction readiness services, such as CFOx, before (1-12 months) going to market.
Transaction readiness is the process of preparing your company’s financial information, strategy, operations, and systems to maximize value. An advisor like CFOx will ensure your company’s accounting and financial records are accurate, organized, and ready to go-to-market.
A business owner should ask themselves the following questions to understand how prepared their company is for a transaction:
Are my financial statements accurate and in accordance with GAAP (Generally Accepted Accounting Principles)?
Are my financial reports and analyses organized so potential buyers can easily analyze the business?
Do my financial reports and analyses reconcile to each other?
Have I identified my business’ non-recurring and non-operational activity?
Do we have an established budget and forecasting process (FP&A) with various up-to-date analyses?
Can I easily locate all key financial, tax, HR, or legal documents?
Have I established a post-transaction or transition plan?
If you are considering a sale or capital raise and you are unable to answer any of these questions, contact us at [email protected] to get started and maximize your business’ value.
