By Paul Willingham firstname.lastname@example.org
Whether your client plans to transfer their business to an insider or sell to a third party, demonstrating the company’s financial stability through sound financial statements is a crucial step in successfully exiting the business. Here are 4 reasons why you should not skip this step.
- Reviewing your clients’ financial statements allows you to get an understanding of their current financial position and to gauge what has been accomplished and what remains to be accomplished. As an advisor you can suggest and help implement strategies to increase profits.
- Your clients’ financial statements give insight as to what makes their business tick and what criteria are used to base all of their financial decisions.
- Their financial statements provide cash flow information which can be used to determine the value of the company and its possible sale price.
- Reviewing their financial statements will help to dispel any misconceptions about the company’s value and the likelihood of growing value quickly.
Reviewing your clients financial statements should be done at the start of the Exit Plan. This will help ensure that your client will have a successful exit and reach their exit objectives.