In past issues of The Exit Planning Review™, we have looked at why cash flow is so important to third party buyers, and by extension, to sellers of closely-held companies. In short, a seller must demonstrate an increasing stream of cash flow from the business. Without a healthy cash flow, a buyer may pass over the opportunity to buy your business in favor of purchasing a “good” company with less risk.
In this issue, we will examine why cash flow is also crucial to those owners who wish to transfer their companies to insiders (employees, co-owners or children) and how to allocate cash flow.
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Every great profit maximizing company has become masterful at getting its clients EVERYTHING they can possibly need or want in relation to their products or services. These companies do not leave money on the table or things to be desired from their clients.
Less than 5% of the population owns a business. So, as a small business owner, you have risen above the ranks of the masses… you’ve worked hard and sacrificed too. You’re already a winner, and that is something worth celebrating. The consequences of winning or losing in business either sweeten or poison everything you do and have in life. 