Preparing Financials for a Business Sale

Introduction

Your financials are your business's résumé—and sloppy records can cost you millions. Preparing your books for sale is a critical step in ensuring a successful exit and commanding top dollar.

1. Clean and Accurate Historicals

Buyers want to see at least three years of accurate financials. This includes income statements, balance sheets, and cash flow statements that tie out and match tax filings.

2. Add-Backs and Normalizations

Owner perks, one-time expenses, or non-recurring costs need to be documented and adjusted to reflect the business’s true profitability.

3. Inventory and Working Capital Management

An efficient working capital structure increases valuation. Excess or obsolete inventory should be identified and addressed.

4. Forecasting Future Performance

Pro forma financials that project revenue and expenses post-sale can be powerful, especially when backed by clear assumptions.

5. Accounting Consistency

Avoid changing accounting methods mid-stream. Consistent categorization and accrual-basis reporting help avoid red flags.

Conclusion

Financial clarity builds trust. Let Blackland Advisors help you prepare financials that speak the language of serious buyers.