Every account reconciled, transactions categorized, statements tying to bank records and tax returns. This sounds basic because it is — and it's the layer where most businesses fail the exam. Nothing built on unreconciled books can be trusted, including your own decisions.
Margins by product or service line against your own trend; the spread between profit and operating cash flow; receivables aging; customer concentration; debt service coverage against what lenders require. Each answers a question a stranger with a checkbook will eventually ask.
Entity type against current profit levels; owner compensation design; state tax elections available but untaken; retirement vehicles unused; insurance coverage against current, not historical, scale. Structures set at founding quietly become misfit as the business grows, and misfit structures leak money annually.
The exit-readiness questions, asked early: would earnings survive diligence? Are add-backs documented? Does anything critical live only in the owner's head? Businesses become sellable through years of small decisions, not a heroic cleanup at the end — and sellable businesses are, not coincidentally, better to own in the meantime.
Same review, same depth, every year — ideally with an outside eye, because owners normalize their own anomalies. The findings become the year's financial to-do list, and the trend across years becomes the truest measure of the business.
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