Great thread here by Avi! Going to provide comments from an M&A perspective šš¼ 1. Mixing personal and business expenses From an M&A standpoint, this can be a deal killer. Buyers want clean books they can trust. If they see personal expenses running through the business, they immediately question how accurate the financials really are. Even if the business is profitable, it creates doubtā¦.and doubt lowers offers. Separating accounts isnāt just good accounting, itās protecting your exit multiple. 2. Doing your own bookkeeping (or letting family handle it) In diligence, messy books slow everything down. Buyers and lenders want to see accurate financials. If the books are a patchwork of family favors and late reconciliations, the buyer assumes hidden risks. That either means a lower price or more time under the microscope. Clean books arenāt just about efficiencyā¦ theyāre an insurance policy for when you sell. 3. Zero cash flow forecasting Avi nailed it - revenue isnāt cash. And in M&A, buyers care as much if not more about cash flow reliability than top-line growth. A business that canāt predict its cash position feels fragile. If you can show disciplined forecasting and steady working capital management, buyers see less risk. Less risk = stronger valuation and better deal terms. 4. Ignoring unit economics This is where good companies quietly lose millions in value. If you canāt prove which products or services are profitable, a buyer wonāt pay full price. Theyāll discount for the unknown. On the other hand, when you can clearly show which lines are high-margin and scalable, buyers get excited, and thatās how you spark bidding wars.
Great thread here by Avi! Going to provide comments from an M&A perspective šš¼ 1. Mixing personal and business expenses From an M&A standpoint, this can be a deal killer. Buyers want clean books they can trust. If they see personal expenses running through the business, they immediately question how accurate the financials really are. Even if the business is profitable, it creates doubtā¦.and doubt lowers offers. Separating accounts isnāt just good accounting, itās protecting your exit multiple. 2. Doing your own bookkeeping (or letting family handle it) In diligence, messy books slow everything down. Buyers and lenders want to see accurate financials. If the books are a patchwork of family favors and late reconciliations, the buyer assumes hidden risks. That either means a lower price or more time under the microscope. Clean books arenāt just about efficiencyā¦ theyāre an insurance policy for when you sell. 3. Zero cash flow forecasting Avi nailed it - revenue isnāt cash. And in M&A, buyers care as much if not more about cash flow reliability than top-line growth. A business that canāt predict its cash position feels fragile. If you can show disciplined forecasting and steady working capital management, buyers see less risk. Less risk = stronger valuation and better deal terms. 4. Ignoring unit economics This is where good companies quietly lose millions in value. If you canāt prove which products or services are profitable, a buyer wonāt pay full price. Theyāll discount for the unknown. On the other hand, when you can clearly show which lines are high-margin and scalable, buyers get excited, and thatās how you spark bidding wars.