Jumping the hurdle before investor and buyer facing
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
Attend my free online class on Tuesday June 8 2021 from 9–9.45 pm and learn how to change your behavior towards money and the way you spend it. Sign up here
Special offers for small business owners
1 . I have moved to Google Workspace and my new email address is email@example.com I now have my own domain name and heightened security and other features. Don’t I look more professional? As a small business owner you too need to move to Google Workspace. For more details on the migration email or Google chat: firstname.lastname@example.org or Tel: +254 101 355 351
2.Readers will get special rates at Ace Dental Care, Westlands Nairobi once they check in with me for a treatment voucher by calling +25472029433. Offer valid till June 30 2021
3.Readers will get special prices on clothes and accessories from Proudly Kenyan a , Nairobi based Fashion designer who’s specialized in Kenyan themed attire.
4.You have three weeks to complete your Income Tax returns on iTax. Going to do it yourself? This is the guide. If you need help get in touch with me
Your free go to market appraisal
My offer of a free three point appraisal of your Power Point Business Pitch and three point appraisal of your Facebook, Linkedin and Instagram pages still stands.To access click here
Wishing you a great week ahead.
I leave you with a quote “Every sale has five basic obstacles: no need, no money, no hurry, no desire, no trust.“ Zig Ziglar
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Dr Melvin D’lima, P.O. Box 66875 00800 Westlands ,Nairobi, Kenya Tel:+254720297433
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