Exit-ready financials
A buyer pays for proven, repeatable profit. Everything that makes your profit hard to prove, from mixed personal expenses to an inconsistent chart of accounts to revenue recognised whenever it suited, costs you at the sale. Exit-ready financials is the work of getting two to three years of clean, consistent, defensible numbers in place before you go to market, with the adjustments documented so that normalised earnings survive a buyer's due diligence. We work with your CPA and, when you are ready to sell, with BizSell.ca.
What you leave with
Financial statements and management reports a buyer and their advisers accept, with normalised earnings documented and no surprises in due diligence.
Who it is for
- Owners planning to sell or bring in a partner within one to three years
- Founders who have had an approach from a buyer and do not know what the numbers would show
- Family businesses preparing for succession
What we deliver
- A buyer's-eye review of your financials: what a buyer and their accountant will question
- A clean-up plan with your bookkeeper and CPA, including the chart of accounts and revenue recognition
- Normalised earnings: documented add-backs for owner compensation, personal expenses and one-time items
- Working capital analysis and a target that supports the deal
- Customer, supplier and revenue concentration reporting
- A due diligence checklist and the finance section of the data room
How it runs
01Review
We read three years of statements, the general ledger and the tax filings the way a buyer's accountant will, and list every issue.
02Clean
We fix the books going forward and document what cannot be restated, with your CPA.
03Normalise
We build the adjusted earnings schedule with evidence for every add-back.
04Package
We prepare the finance section of the data room and rehearse the questions a buyer will ask.
Engagement and fees
A 90-Day Sprint at $80K to $250K for the full review, clean-up and normalisation, ideally started two to three years before a sale. A Business Acquisition session, 60 minutes at $399, is the right first step. When you are ready to sell, BizSell.ca provides a formal valuation at $3,500 flat and handles the sale process. Every engagement is scoped after a call and confirmed in writing. See consultations and fees.
What a buyer sees
A buyer's accountant reads your financials looking for reasons to pay less. Revenue that jumps at year end. Margins that move without explanation. Owner salary below market, which means the profit is overstated. Personal expenses in the business, which means it is understated but unprovable. A customer that is a third of revenue. Receivables that have not moved in a year.
Each finding becomes a price adjustment, a holdback or a reason to walk. The point of the work is to find these first, fix what can be fixed, and document the rest so that it is a known fact in the package rather than a discovery in diligence.
Normalised earnings and why evidence matters
A buyer values the business on normalised earnings, usually EBITDA or seller's discretionary earnings, which is reported profit adjusted for things that will not continue under new ownership. Owner compensation above or below market, personal vehicles and travel, one-time legal costs and family members on payroll are typical adjustments.
Every adjustment must be supported. A list of add-backs with no evidence is discounted or ignored. The schedule we build ties each item to the ledger and to a document, and it is prepared with your CPA so that the year-end statements and the normalised schedule tell the same story. This is where most of the value in the work sits.
Working capital, concentration and timing
Most deals include a working capital target. If the business needs more working capital than the buyer expected, the price falls at closing. We calculate what the business actually needs, show the seasonal pattern and set the target with that evidence, so the closing adjustment is not a surprise.
Concentration is the other common adjustment. A buyer discounts a business that depends on one customer, one supplier or the owner's personal relationships. Reporting it honestly and showing the trend over three years is better than hoping it is not noticed. Start this work two to three years out. Clean numbers over several years are worth more than clean numbers over one, and some fixes take a full fiscal year to show.
- Three years of year-end statements, tax filings and general ledger detail
- Owner compensation, benefits and any personal expenses run through the business
- Customer and supplier lists with revenue and purchases by name
Questions about this service
How far ahead of a sale should we start?
Two to three years if you can. A buyer looks at three years of history and the most recent year carries the most weight. Starting early means the clean-up shows up in reported numbers rather than only in adjustments, which a buyer trusts more.
What is the difference between EBITDA and seller's discretionary earnings?
Both start from profit and add back interest, taxes, depreciation and amortisation. Seller's discretionary earnings also adds back one owner's full compensation and benefits, and is used for smaller owner-operated businesses. EBITDA is used for larger companies with a management team that stays.
Who does the valuation?
BizSell.ca, Ali's brokerage, produces a formal valuation at $3,500 flat using three methods: discounted cash flow, market multiples and asset-based, with normalised EBITDA and SDE, in a 25 to 35 page report. The exit-ready work makes that valuation stronger and easier to defend.
Can you help with succession inside the family?
Yes. The finance work is the same: clean numbers, normalised earnings and a working capital view, so that the transfer is priced fairly and the next generation inherits a business they can run on the numbers. Legal and tax structuring is for your lawyer and CPA.
Start with a finance review.
Ninety minutes with Ali on your cash, margin and pricing. You leave with the four numbers to watch and the two or three moves that change them, whether or not we work together.