Rowan De Klerk | CEO | The CFO Centre South Africa | mail me |
Consider this scenario. You have invested ten years into building your business. It has supported your lifestyle, paid salaries, funded personal expenses and allowed you to draw dividends.
Your accountant has helped you minimise tax by reducing reported profit and keeping the balance sheet light. At the time, it felt efficient and responsible. Then you decide it is time to sell, and suddenly the numbers that helped you save money now work against you.
Your profits are low on paper, the balance sheet appears weak, and a potential buyer cannot justify a premium valuation. The business may have strong potential, but without evidence of sustained and growing profitability, the value you thought you built is not reflected in the financials.
The lifestyle trap
This is a situation we see often, especially in lifestyle businesses where the focus has been on income rather than long-term value. Many owners only start thinking about valuation when they are ready to exit, instead of years earlier.
Business owners underestimate how long it takes to prepare a company for sale…
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Read the full article by Rowan De Klerk, CEO, The CFO Centre South Africa, as well as a host of other topical management articles written by professionals, consultants and academics in the December/January 2025/26 edition of BusinessBrief.
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