Banking and lending · 4 min read · Published
What a buyer will find in your books, and what to fix first
By Chris Greco, Founder and President.
A buyer will find three things in your books before they find anything else: add-backs tangled into the P&L, a working-capital level nobody has measured, and receivables or inventory they will discount. Fix them in that order; each one moves the price.
Owner expenses, family payroll and one-time items that are not documented get argued down to zero. Working capital that has never been measured becomes a target the buyer sets. Receivables over 90 days and inventory that has not moved in a year come off the price at close.
Twelve months before a sale, normalize the P&L with every adjustment documented, measure working capital monthly, and clean up the receivables and inventory you already know about. A data room that answers questions before they are asked is the cheapest negotiation you will ever do.
Where this applies
Chris Greco
Founder and President, CFO Anywhere. CFO for owner-led companies since 2002. Executive MBA, Gies College of Business, University of Illinois.
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