Spring Cleaning is Good Business

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Spring Cleaning is Good Business

We’re just a few weeks into spring and that means it’s time for spring cleaning, at home and at work. I only wish my clients did a regular housekeeping. It would make due diligence and the whole business sale process a lot smoother. Here’s what I mean: 

Clean financials:

I harp on this a lot. Messy numbers and casual accounting practices create headaches when it comes time to sell. Audited financials, on the other hand, can actually increase a buyer’s offer.  

Hopefully, you have a good relationship with your CPA. If not, due diligence can be painful for all involved. Answers trickle in piecemeal, responses drag out, and parties on both sides get frustrated.  

Clean facility:

Neatness matters. Buyers will always comment with pleasant surprise when a facility is clean and organized, with a logical place for equipment and inventory.  

This goes for office teams too. If you have even one manager who hoards paperwork and lets things pile up, buyers will take notice.  

Digital files:

We brought on some new team members a while back and quickly realized our digital files needed some help. What exactly, for example, belonged in “Scott’s stuff”? (I didn’t even know!) Now our file systems are better labeled and more intuitive, and that’s going to make work more efficient for everyone.   

One company I know has even planned a digital spring cleaning as a team. They’ll spend an hour or so going over their file systems, agreeing on things that should be deleted, moved, or renamed.  

Extra equipment:

There’s just something about machine shop guys—they love going to auctions and getting good deals. But a lot of that equipment goes unused. Then we have a problem when it’s time to sell, and I have to tell them that their $10 million in asset value is only worth $8 million on a cash flow basis. 

Most business owners would rather maintain employee jobs and sell a going operation than sell off their assets one by one. I currently have clients in North Dakota in the process of right-sizing their business. They added a ton of equipment when activity was hot in the Bakken, but now they have more than they need to support sales.  

They’re taking a portion of their equipment to auction. That revenue, together with what we can get for the business, will get us closer to the seller’s goals. There no reason to keep excess equipment on the books in a sale.  

So as you open up your windows this season, take some time to clean and organize. Declare a jeans day and get the entire team involved. You’ll all be more productive and you’ll be better prepared when it comes time to sell. Buyers will take note and reward these efforts.  

By Scott Bushkie

Scott Bushkie is Managing Partner and Founder of DealCoach.

With more than 20 years in the Mergers and Acquisitions (M&A) industry, Scott is a recognized leader in the field, providing exit strategies, business valuations, and M&A advisory services to business owners in the lower middle market. He has successfully executed sales to domestic and international buyers, private equity firms, family offices, and strategic buyers. Follow DealCoach on Linkedin

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DealCoach is headquartered in Green Bay Wisconsin with an office in Milwaukee Wisconsin and helps customers find out how much their business is worth with online business valuations and advisory services. Our business valuations also known as an Estimate of Value (EOV), help prepare buyers and sellers for the sale.  DealCoach also helps business owners grow value with a Business and Market Analysis and plan for retirement, estate & financial planning, benchmarking, and strategic planning. DealCoach servers and has provided business valuations for businesses located in the United States and Canada. 

We are here to tell you what you need to hear in order to make a well-informed decision with most likely the largest financial transaction of your life. Our team has over two decades of M&A experience, and we have been completing Estimates of Value for our clients for over nine years.


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