The purpose of these articles is to educate both buyers and sellers of the many different issues related to a business transfer. The subject matter includes things like the value of a business, the variables involved in a business transaction, financing and structure of a transaction, planning your exit strategy, etc.
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Tuesday, 12 February 2013
Oh, it's just a Closet!
The skeletons will have to come out at some point.
applying for a loan or selling the company, business owners must be prepared to
popular ‘skeletons’ the find their way to the forefront are:
·Outdated Inventory – obsolete or redundant inventory only
artificially inflate your balance sheet.They do not necessarily add value to your business.Cleaning and purging on a quarterly basis is
a good way to stay on top of this measure.
·Obsolete Technology – every industry is different, but
it’s important to regularly be reinvesting in your business.Tradeshows, suppliers and trade publications
are great sources for information on the latest and greatest technology in your
·Largest Client that just Closed – if you have any customer that
represents greater than 10% of your overall gross sales you run the risk of dramatically
affecting your profitability and business value. Diversification is the key to long
·Key Employee who just Quit – Do you perform regular performance
evaluations, do you stay on top of industry trends for wages and benefits, are
you continually motivating and challenging your top people?For key people remuneration levels are
important, but often times they are motivated by other factors like workplace
culture, challenging work, effective leadership, learning opportunities,
internal relationships, etc.
selling a business it must look good in all areas.To not be disappointed, business owners must
plan, address weaknesses, and be realistic in their expectations if they don’t
Do you have a small business question
you would like answered about this article or others?
Bill Sivell is a salesperson with VR
Windsor Inc. [www.vrwindsor.com]
519-903-7807, which sells businesses to buyers across Canada and around the
world. His 14-year career includes diverse senior management positions in
marketing, advertising, sales management and operations management. His blog
appears every Tuesday.