"Our books are clean."
Most owners believe this.
Most are wrong.
Clean books and buyer-ready books are different things.
Clean books: Revenue and expenses are accurate. Taxes are filed. Nothing illegal.
Buyer-ready books: Adjusted EBITDA is clearly calculated with written justifications. Owner compensation is separated into market salary vs. distributions. One-time expenses are identified and explained. Capital expenditures show patterns, not chaos. Working capital is optimized and predictable.
The gap:
We've seen businesses with "clean" books that took three months to get buyer-ready.
Why? Because clarity matters more than accuracy.
Not sure if your business is exit ready? Take our 5-minute Exit Readiness Assessment.
A buyer can't understand your $2.3M EBITDA if it includes:
- Your $400K salary (market rate is $180K)
- Your kid's $75K salary for minimal work
- $50K in "consulting" that was actually distributions
- $35K in one-time legal fees
- Your personal vehicle expenses
All legal. All accurate. All confusing.
The fix:
Use adjusted EBITDA from Day 1. Show what a buyer would actually earn.
Separate owner compensation into market salary + distributions.
Track add-backs monthly, not at year-end scrambling.
Keep personal expenses out of the business.
Show your financials to your CPA and ask: "Could a buyer understand these in ten minutes?"
If not, simplify.
The premium:
Businesses with buyer-ready financials close 40% faster and command 0.5-0.8x higher multiples.
Because buyers pay for certainty. Confusion creates discount.
Clean up your books today. Your future buyer will pay you for it.
