In today’s business climate of uncertainty, many owners are contemplating an exit strategy. One of the key elements is focusing on what the numbers are telling you rather than your gut. “Quick Printing” contributing writer and business consultant John Stewart wrote an excellent article in the July 2011 edition (Page 24). It’s worth reading for anyone who is contemplating selling/merging/tucking-in their business.
Bluntly, it’s about understanding that a buyer of a business is looking for ROI – and that’s based purely on the numbers. If a business has declining sales and is losing money, it basically has no real value. Oh yes, there might be some synergies and “goodwill,” but the buyer is not interested in past performance, but future returns. Regardless of how much sweat and tears has been put into the business, selling is all about the numbers — as John reminds us.