Selling Your Baby Putting Off the Prep Work Why wouldn’t you prepare for a transaction? Owners often deny they’re in transition. They say they want to sell, but they may resist letting go. A thorough review of the business forces you to confront your mistakes and weaknesses. Doing so can improve your chances of making a successful transition. On the other hand, putting off a review usually invites complexity, self-doubt and the likelihood you won’t fetch top dollar.
THE REAL WORLD: PREPARING YOURSELF
“W
hen we first thought about selling our DD (developmental disabilities) company, we were in trouble because of budget cuts. We decided to reposition ourselves by reducing certain services where the reimbursement was too low. It was difficult to make those changes, but it was the only way to survive. “It took us more than a year to become profitable again and another year before we could sell our company. Improving our cash flow was the hardest part. I still can’t read a cash flow statement.”
“W
hen I began thinking about selling, our financial records were pretty disorganized. I hired a new CPA, and she told me we were lucky that we only owed some back taxes. We worked out a payment plan and she helped us develop financials I could actually understand! The big change: we converted our accounting to accrual and kept our taxes on a cash basis.”
“T
o be honest, I didn’t care about the financial part and left it to my wife, who is good with numbers. After the kids left home we considered selling our two assisted-living facilities and keep our in-home care business for a few more years “Business was quite profitable, but the hardest part was trying to be fair with our top two managers who had been with us for years. They didn’t know we were planning to sell the facilities initially, but then we decided to see if they would be interested in buying them. One was and the other wasn’t, but it eventually worked out. In the process, both of them gave us good ideas about how to improve our business model.”
“O
ut of the blue we decided to move so I decided to try to sell my therapy practice at the last moment. I had lousy financial records and so I just closed shop.”
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