If you need to sell an IT enterprise, you need Robert Chalfin’s concise reference book. His advice is practical and sound, and his CPA background is a bonus here, as is his experience gleaned from lecturing at the Wharton School.
The book begins with a discussion of the attributes that buyers seek in a business, types of buyers you would want to sell to, the right reasons for selling, and most important, timing.
The accounting and finance issues covered in Chalfin’s book are basic. Need to get a performance measurement of your business? Calculate any number of financial ratios (e.g., working capital, ROI, ROA, software revenues, and service revenues—the last two are IT related). Tedious aspects of selling a business covered here include closing out the books, accurate stock appraisal, a comparative balance sheet that reflects two or more years of information prior to the sale, and an accurate P&L that reflects a good number of years prior to the sale. Some of the heady legal aspects of a sale would be better offered to a CPA, business advisor, or lawyer, as Chalfin recommends.
In the end this book is a wonderful surprise for any entrepreneur whose eyes may otherwise glaze over at such details as discounted cash flows and fair market value. Chalfin ends with a chapter titled “After the Sale.” His advice: Prepare to work at the former business for a while, perhaps less than eighteen months. Although that may seem an odd arrangement when you have sold a business, it’s a normal part of the process, he writes.
Chalfin is President of The Chalfin Group, Inc., a strategic planning and advisory services business.
- Sara Grant