There are many opinions about what attributes or characteristics buyers seek, but here is what we know: the characteristics buyers search for must exist before the sale process even begins and it is your job as the owner to create value within your business prior to the sale. • A solid, diversified customer base – buyers typically look for a customer base in which no single client accounts for more than 10 percent of total sales. a diversified customer base helps insulate a company from the loss of any single client. if the majority of your customer base is comprised of only one or two good clients, consider reinvesting your profits into additional capacity that will make developing a broader customer base possible. • A realistic growth strategy – buyers tend to pay premium prices for companies with realistic strategies for growth. even if you expect to retire tomorrow, it makes sense to have a written plan describing future growth and how that growth will be achieved based on industry dynamics, increased demand for the company’s products, new product lines, market plans, growth through acquisition, and expansion through augmenting territory, product lines, manufacturing capacity, etc. it is this detailed growth plan, properly communicated, that helps to attract buyers. • Effective financial controls – financial controls are not only a critical element of business management, but they also safeguard a company’s assets. effective financial controls support the claim that a company is consistently profitable. the best way to document that your company has effective financial controls and that its historical financial statements are correct is through a certified audit or a verified financial statement by an established cPa firm. FEATURE story • Stable and improving cash flow – ultimately, all value drivers contribute to stable and predictable cash flow. it is important, especially in the year or two preceding the sale of the business, that cash flow be substantial and on an upswing. you can begin increasing cash flow today by simply focusing on ways to operate your business more efficiently by increasing productivity and decreasing costs. you can install these value drivers and better position your company to secure a premium price upon your exit with the help of a trained exit planning advisor. Stephen Klein, CPA is CEO and founder of EXIT STRATEGY Solutions, LLC and a member of Business Enterprise Institute’s International Network of Exit Planning Professionals. The company provides transition and exit planning solutions and merger and acquisition services to business owners. He can be reached via email at SKlein@ExitStrategySolutions.com or by phone at (609) 731-8419. circular 230 disclosure: Pursuant to recently enacted u.s. treasury department regulations, we are now required to advise you that, unless otherwise expressly indicated, any federal tax advice contained in this communication, including attachments and enclosures, is not intended or written to be used, and may not be used, for the purpose of (i) avoiding tax-related penalties under the internal revenue code or (ii) promoting, marketing or recommending to another party any taxrelated matters addressed herein. CHBME My Stay on track with YOUR CHBME accreditation any time, day or night. Just scan the code at right or log in on the HBMA website, go to My Account > MyCHBME. the journal of the healthcare billing and management association 23
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