You've worked hard to build your business, but now you are thinking of selling all or part of it. Before you start courting buyers and investors, are you sure that you business is fully valued? Are you leaving profit on the table?
By necessity, many business owners are focused on the day-to-day. However, in our experience, many businesses are undervalued because owners have neglected to look at the big picture. Your own retirement security and the continuity of your business legacy depends on establishing a profitable and realistic exit strategy.
Before you put your company on the block, step back to evaluate it from the prospective buyer or investors view. Ask yourself:
- How strong is your cash flow?
- What operational improvements can be made?
- What compliance issues need to be addressed?
- Has the company completed a business valuation?
Even small reporting issues can make or break a deal. For example, Prather Kalman, PC was hired by a buyer to conduct due diligence prior to its acquisition of a $25 million dollar business. During the due diligence process, we determined that the seller was late in filing IRS forms regarding its 401K pension plan incurring penalties that could potentially be in excess of $3 million dollars. After much negotiation, the seller agreed to be responsible for the penalties.
At Prather Kalman, we help clients realize value of what they have developed over their lifetime. From employee stock ownership plans to third party sales, our experienced group of CPAs and business consultants can advise you which exit strategy solution is best for your individual situation.
Contact us today so that we can evaluate your business and address any issues prior to putting it up for sale. Together we will create a customized plan to minimize taxes, significantly increase margins and maximize the value of your business in any market.