Create financials that match what you say in words.

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A business leader will describe their business, and the bank or investors will verify that by reviewing the only true record of a business: the financials. Make sure they are optimized to tell the true story of your business.

TIPS:
1. Show each entity in your business.
2. Show each product or service in your business.
3. Have sufficient detail so there aren't any questions.
4. Clearly show profitability by market and product.

Document contracts and clients.

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Investors, bankers, and buyers will need to verify that all of the contracts and other documents are in place so that they can reduce their risk.

TIPS:
1. Have a central location for document storage.
2. Be able to show that you have every contract at hand.
3. Have a copy of the employee manual and every employee contract, which may include non-compete clauses.
4. Have a copy of every worker’s tax documents.

Do you have individuals that make or break the business?

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If there is a key person in the business that should leave the business will fail, the business has no value other than the sale of the business in pieces. Avoid this trap.

TIPS: 
1. Document that a key person in the business has a successor.
2. Have non-compete clauses in key person employment contracts.
3. Create a documented business structure that avoids creating a key person.

Discover if a financial aspect of the business may change drastically over time.

For some businesses to remain valuable long-term, they need to stay at the same location. A rising rental market will affect profitability and the company’s eventual sale value.

TIPS:
1. Make sure that any long-term vendor contracts that will significantly increase in value are included in your financials.
2. Create a tax strategy so that depreciation and amortization are optimized for both current operations and that they are included in the final sales strategy.
3. Remain aware of the overall marketplace and the sustainability of each product and service.

​If you need assistance with anything we’ve discussed here, let’s talk so you can reach your financial goals, growth, and revenue. Spend your time doing what you do best and make more money by having us solve your most pressing financial issues.