Give your prospective buyers a profit design template
Prospective buyers want to see that your business is profitable. Sounds obvious doesn’t it? But you would be surprised how many business owners try and sell their business without effective profit reporting processes and evidence in place. To give your business the extra edge when it comes to sale time, don’t just present profit reports, give your buyer a profit design template so they can see:
- exactly how you have created ongoing profit
- what areas they can leave alone to keep generating profit
- where there might be room to expand profit areas and increase profits
Avoid these common profit design pitfalls
To make your profit design instantly transparent and accessible, try not to:
Remember, profit reporting is about just that – giving a clear, consistent, easy to read report about exactly how much profit is being generated from each area of your business.
- Generate financial statements directly from your bookkeeping software (it is rarely in a useful format to help make operational sense or decisions)
- Include too much information on costs
- Skimp on information about products and services sales and profits
Give a prospective buyer this instant snapshot and you will have leaped over the first obstacle to the buying process (fear that the business is not profitable).
Profit Reporting for small business
Maxell Consulting has designed automated spreadsheets to modify the P & L statement into something more meaningful. The main benefit is that the system allows trend reporting. This means you can be a lot more assertive in steering your profit design and making it clear to a buyer where the greatest areas of potential lie.
Because the profit reporting is kept within a spreadsheet, it is easy for you to access the information and undertake customised analysis. It allows for easy data entry and reports can be customised to suit each business. In some cases the system can interface with your accounting or bookkeeping software.
As the system is based in Excel, the information is readily available to do other reporting and analysis and is therefore easy to present to an interested buyer.
If you are getting ready to sell, get your profit design in good shape
We can help by:
- Auditing your existing business operations and reports to determine the key financial indicators and reports that you need to measure to achieve your goals and objectives.
- Developing and implementing an automated spreadsheet system to collate your financial information into an accessible and informative profit reporting system.
- Implementing management procedures to monitor and review your performance and developing action plans to address areas that need improvement.