6. The truth in the numbers.

Dave had always known the business was solid. Margins were consistent, debt was manageable and cash flow rarely kept him up at night. But when the time came to prepare the business for sale, John made it clear that feeling confident was not enough. Buyers would want proof. Not just topline figures but a full, clear and credible picture of the business’s financial reality.

This was the first time Dave had looked at the numbers not as an operator, but as a potential buyer might. With the help of RegenerationHQ, he began to dig deeper. What would someone want to see? What would raise questions? What would build trust? The goal was not just to present the numbers but to tell a story that made sense and stood up to scrutiny.

Where did Dave start?

Like many owners, Dave had a general sense of how the business was tracking. He could glance at the P&L and know if things were heading in the right direction. But the financials had never been packaged for anyone else. Reports were functional but not polished. Some things were buried in spreadsheets. A few cost centres were blended together. The numbers made sense to him but not to someone unfamiliar with the business.

What is the problem we are working on?

Buyers need clarity, consistency and confidence. If financial data is incomplete, messy or hard to interpret, it raises doubts. Even strong businesses can lose value if the numbers are not clean. Dave needed to transform internal reporting into something that could withstand external analysis. That meant not just tidying up, but explaining the why behind the numbers.

What are the options we can explore?

Dave could keep things as they were and rely on conversations to explain any gaps. He could hire someone to do a quick clean-up just before going to market. Or he could take the time, with help from John and the team, to build out a financial reporting pack that would speak clearly to potential buyers and reduce friction in the sale process.

What reflective questions should Dave be considering about this part of the journey?

• Would the numbers make sense to someone seeing them for the first time?

• Are there any figures I would struggle to explain under pressure?

• Have I been consistent in how I report performance across years?

• Where are the blind spots in my financial data?

• What story do the numbers tell about the future, not just the past?

What decision has Dave made?

Dave committed to building a complete buyer-ready financial pack. This included three years of clean financials, clear breakdowns of revenue by product and customer group, normalised earnings, and commentary on any unusual items. He also worked with his accountant to tighten up reporting structures and move away from anything that required explanation or guesswork.

Why did he make that choice?

Dave wanted to reduce risk for the buyer and increase confidence in the value of the business. A clean, easy-to-understand set of numbers meant fewer questions, less negotiation pressure and a faster deal process. He also knew that having strong financial clarity would give him an edge when talking to brokers or buyers.

What are the implications for the rest of the journey?

By investing early in financial clarity, Dave made the entire exit journey more efficient. It positioned the business as credible and well run. It also gave him a stronger sense of what the business was truly worth, which helped guide later conversations around valuation, deal structure and negotiation strategy.

What is HR best practice?

Finance intersects with people in areas like payroll, incentive structures and leave liability. HR best practice during this stage is to ensure all employee-related financial obligations are up to date, properly recorded and easy to explain. This removes potential red flags during due diligence.

What is the psychological perspective?

For many owners, facing the numbers in this way can be confronting. It removes any comfortable assumptions and lays things bare. But it also gives clarity. Once Dave saw the numbers clearly, he felt more in control. It helped him shift from emotional value to market value, which made the process less personal and more strategic.

What are the red flags to be watched out for and how can they be eliminated or mitigated?

Common red flags include inconsistent reporting, unexplained fluctuations, personal expenses running through the business and poor cash flow visibility. These can be addressed by cleaning up the accounts, standardising how information is presented and preparing a written commentary to explain any unusual items before buyers ask.

What has been the immediate effect on the business of taking this action?

Internally, financial discussions became sharper. Decisions were made with better data. Externally, the business became more appealing. Even before going to market, Dave had conversations with a broker who said the numbers were some of the clearest they had seen in a business of this size.

Golden nugget

Buyers do not just want to see the numbers. They want to believe them.

Talk to us about your exit journey. www.regenerationhq.co.nz/contact