Many founders take great pride in what they have built – and rightly so. A loyal customer base, a talented team, a strong brand – these are real achievements.
But when it comes to selling your business, buyers are more interested in the numbers than your story.
More specifically, they focus on financial stability – because that’s what determines whether your business looks like a safe, valuable investment or an avoidable risk.
Having worked with businesses preparing for sale, we have seen time and again how financial stability shapes both buyer interest and valuation. Let’s break down what this means in practice and what serious buyers look for before making an offer.
1. Consistent Profitability
Buyers value predictability.
They want to see at least three years of stable, reliable earnings – not just one good year followed by inconsistency.
What they assess:
- EBITDA that’s steady and credible
- Gross and net margins that hold up against industry benchmarks
- No unexplained spikes or dips that suggest volatility
When profitability is predictable, buyers feel more confident that they are stepping into a business that will continue to perform.
2. Strong Cash Flow
While EBITDA can be adjusted, cash flow reflects reality.
Positive operating cash flow demonstrates that the business:
- Generates real cash, not just paper profits
- Can fund its operations without relying on debt
- Converts revenue into actual money in the bank
Buyers will scrutinise whether the cash flow is sustainable – because that’s what ultimately funds growth, debt repayments, and dividends.
3. Clean, Transparent Financial Records
No buyer wants to navigate messy accounts.
What they want to see:
- No personal expenses running through the business
- Clear and accurate P&L, balance sheet, and cash flow statements
- Ideally, accounts prepared or reviewed by qualified professionals
Clean financials make a business easier to trust – and easier to buy.
4. Healthy Working Capital
Cash flow can look good on paper but be undermined by poor working capital management.
Buyers examine:
- How quickly customers pay (debtor days)
- How suppliers are managed (creditor days)
- How efficiently stock turns over
A business that manages its working capital well is seen as financially disciplined – and lower risk.
5. Low Financial Risk
Buyers want to understand where the risks are – and avoid businesses that look fragile.
They’ll look for:
- Dependence on one or two major customers or suppliers
- High levels of debt with no clear plan to reduce it
- Unstable cost structures
The more diversified and balanced the business looks, the stronger the buyer’s confidence.
6. Transparent Adjustments
It’s normal for sellers to present adjusted earnings (adding back owner’s salary, one-off costs, etc).
But buyers expect:
- Clear documentation
- Justifiable adjustments
- No surprises during due diligence
When adjustments are reasonable and transparent, trust builds – and negotiations move forward more smoothly.
7. Evidence of Growth
Buyers don’t just buy the present; they invest in future potential.
A business that shows consistent, profitable growth often attracts higher valuations – because it signals scalability and momentum.
Final Thought
Your story, your effort, and your vision matter. But when the time comes to sell your business, it’s your numbers that do the heavy lifting.
If you are considering a sale in the future, the best time to start building financial stability is now.
Curious how a buyer might view your business?
Feel free to connect or send a message – we are always happy to share an initial perspective.
You can get in touch with Hari Pillai, Corporate Finance Manager or Ollie Newbold, Corporate Finance Partner on 01242 776000 or hari.pillai@randall-payne.co.uk or oliver.newbold@randall-payne.co.uk.
