Getting Ready FOR SALE - Tip 1

One of the biggest mistake we see is business owners using their day-to-day operating P&L and thinking that their numbers are pretty good instead of a “Vendor Ready” P&L when trying to sell their business.

Generally the goal when operating a business is to get your profits down as low as possible so your business pays minimal tax.
When selling a business you want the complete opposite. You want your P&L profits to look as attractive as they can… This is where the “Vendor Ready P&L” comes into play.

What is a Vendor Ready P&L?

A Vendor Ready P&L is a report that has all of your “Non” day-to-day expenses taken out, for example: a staff conference ticket, travel, group management cost, car lease, depreciation etc.

Anytime Fitness businesses are usually sold at a “times earning” value eg. x3. So if you think of it this way for every $1000 you clean up your accounts = $3000 onto your value of your business!!! Hense why this activity is SO IMPORTANT!!!!

Talk to your accountant or bookkeeper regarding this or alternatively Keychange Business Broker has teamed up with a qualified accountant that has worked on many Anytime Fitness clubs and numbers for years and can perform this task at a very reasonable price.

Important to note…

Before you go ahead and just start removing expenses remember for every adjustment made you must be able to state the reason why the adjustment has been made. Otherwise numbers may begin to look untrustworthy and who wants to by a business with number they can’t trust.

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Have a question or if your thinking of selling please call or email us.