What’s Your Number?


When it comes to selling their business, business owners frequently focus only on the sale price, to the exclusion of the sale terms. This is a serious mistake because the sale price, while an important number, isn’t the most important number to focus on. The most important number to focus on is how much money you end up with after all terms have been complied with, and this can be different from the sale price.

One good example of this principle at work is the concept of the “working capital adjustment”. I call the working capital adjustment the “secret” way to get a higher price (if you’re a seller) or the “secret” way to get a lower price (if you’re a buyer). Let me explain.

WANT TO READ MORE?  This article is available to email subscribers only.  Click here to sign-up for Don Sihota’s Business Succession Update (or contact jmitchell@cwilson.com).