198 | Building toward an Exit with Maggie Lord

Hey ambitious bookkeepers!

Let's be real - as bookkeepers, we're often the first to know when a client is considering selling their business. Those "hypothetical" questions about cleaning up financials? The sudden interest in proper expense categorization? Yep, classic pre-sale signals.

That's why I invited exit strategy expert Maggie Lord to the Ambitious Bookkeeper Podcast. Maggie sold her wedding media company to David's Bridal after 12 years and now helps female founders do the same through her work with The Whisper Group.

Our conversation was PACKED with insights about how bookkeepers play a crucial role in business exits.

Listen here or on your favorite podcast player, or watch the video version on YouTube >>

Now let's dive into some highlights!

The Bookkeeper's Critical Role in Business Sales

When a client decides to sell, guess who becomes one of their most valuable assets? YOU. As Maggie explained:

"Bookkeepers play a critical role in making sure the M&A activity actually gets across the finish line. Many times the acquiring company speaks directly to whoever is running your finances. The CEO doesn't even need to be involved in that part of it."

That's right - your organization, attention to detail, and ability to present clean financials could make or break your client's deal.

Your client's potential buyer will be looking for clarity around:

• Clean separation between business and personal expenses
• Clear categorization of expenses (not just "legal fees" but what those fees were specifically for)
• Profitability trends and margins
• Cash flow patterns

When Should Clients Start Planning an Exit?

One of my biggest takeaways from talking with Maggie was about timing. The ideal window? About 12-24 months before selling.

"Most women that I work with find me when they've already made the decision and they're ready," Maggie shared. "But I do have a group of clients who are smart enough to identify that they're not ready to exit now, but what do they need to do for the next 12, 24, 36 months to maximize their deal value."

This is where you come in! You can help position your clients for success by:

1. Flagging co-mingling issues early
2. Setting up systems to track profitability by service/product line
3. Creating clear documentation around financial processes
4. Building dashboards that showcase financial health

Beyond the Balance Sheet: Valuation Factors Clients Miss

Here's something fascinating: a company's worth isn't just about revenue multipliers. Maggie highlighted several non-financial factors that impact valuation:

• Social media presence and following
• Years in business
• Industry niche and positioning
• Networking connections
• Growth potential
• Systems and processes that allow the business to run without the founder

That last one is HUGE. As Maggie put it: "The number one concern at a very small company is the acquirer asking how much of this business revenue is because of you. If you were removed from the company, will this company be able to continue to function and add revenue?"

Types of Exits to Know About

Not all exits look the same. Some options Maggie highlighted include:

• Complete sale: The founder walks away entirely
• Partial exit: The founder stays on to handle specific functions they enjoy
• Employee transition: The founder becomes an employee of the acquiring company
• Consultant arrangement: The founder exits day-to-day operations but remains available for guidance
• Earnout structure: The founder receives some cash upfront but must hit targets to receive the full payout

How to Spot a Client Ready to Sell

As bookkeepers, we have a unique lens into our clients' businesses. Here are signs your client might be considering an exit:

1. They're suddenly interested in cleaning up their books
2. They ask about proper expense categorization and documentation
3. They're systematizing processes they previously handled themselves
4. They mention feeling burnt out or wanting to focus on specific aspects of the business
5. They're exploring growth opportunities they previously ignored

What You Can Do Now

Whether your client is actively planning to sell or not, you can help position them for success by:

1. Keeping business and personal expenses strictly separate
2. Documenting financial processes and systems
3. Creating clear reports that showcase profitability trends
4. Flagging duplicate or unnecessary expenses
5. Helping them understand their true cash flow

Remember, as Maggie put it: "If you don't know what your numbers are, it just makes life so much harder." That's where we come in as bookkeepers - making the financial picture crystal clear so founders can make confident decisions about their business future.

Have you helped a client through a business sale? I'd love to hear your experience in the comments below!

Connect with Maggie

Want to learn more about business exits? Connect with Maggie Lord at wearethewhispergroup.com or maggielord.com, or follow her on Instagram @maggielordandcompany.

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