Tip #4: Burying Personal Expenses and Assets in the Business Financials

Burying Personal Expenses and Assets in the Business Financials

Minimizing tax liability is a strategy all business owners think about. But when it comes time to obtain financing or sell the business, buried personal expenses and assets can create a problem in determining the true cash flow.

Buyers and bankers won’t always give credit to many of these items. As a result, the cash flow can be suspect. And when you apply a multiplier to determine the value of the business, the results can be disappointing.

It is in the best interest of a business owner to show a healthy bottom line in the years preceding the sale of their business to get the highest price possible.

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