Jumping the hurdle before investor and buyer facing

4 min readJun 6, 2021

Money matters with Mel Weekly Newsletter Issue#19

Every business has to be constantly preparing itself for sale. This requires a firm handle on all the important numbers. Selling a business is an emotional venture. A good reason to sell or the existence of a “hot” market can ease the burden, as can the help of professionals. It has been done before. Hilda Moraa converted her under graduate project at Strathmore University into a start-up called Weza Tele which was sold for USD 1.7 Million in 2015. Besides Tax and other regulatory compliance Weza Tele would have had to demonstrate traction, profitability and scalability.

Serious buyers and investors would want to see the debt to income ratio (DTI) for loans and debts that the business is servicing. This is calculated as follows: DTI = Monthly debt payments /Gross Monthly income In general a DTI of 36% and under will qualify for a further loan. Buyers and investors would be interested in the business if the DTI is between 33% to 60%

Separate Bank Accounts for Income, Operating expenses, Owners Compensation, Profit and Tax would demonstrate that you are working profitably in your provision of products and/or services. Bottom line — get your business and every sale into profit making territory. This way you are ready to access more debt and equity finance as well as be ready for sale.

1.Be deliberate with your plan to make a profit from your business 2.Learn how to manage your personal and business finances

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