In the dynamic world of SMEs, the decision to sell a business is one of the most delicate and critical moments for any entrepreneur.

At Winnerge, we frequently encounter entrepreneurs who wish to handle the sale of their company without involving the CFO. This choice can be a significant mistake.

Why?

Although many of our consultations start with the entrepreneur’s independent decision, whenever we are asked to exclude the CFO from negotiations, we highlight these 3+1 reasons why the CFO is crucial in M&A transactions.

1. The CFO identifies the right moment

One of the most crucial aspects of selling a business is timing. With a comprehensive understanding of the company’s financial and operational status, the CFO is often the first to identify when the business has reached its peak value. This insight, grounded in data and continuous analysis, is essential for maximizing the sale price. An experienced CFO can recognize market signals and favorable financial conditions to achieve the best possible deal.

2. The CFO assembles the right team

The CFO plays a key role in forming the advisory team for M&A transactions. Selecting experts with the necessary skills and network is crucial for navigating the complex sales process. A knowledgeable CFO knows which advisors are best suited to handle the various stages of the transaction, ensuring that legal, tax, and financial aspects are managed with professionalism. It is often the CFO who recommends that the CEO engage our company to manage the SME’s M&A process.

3. The CFO drives value

To attract buyers and achieve a favorable valuation, it is essential that the company’s financials are presented optimally. The CFO is responsible for optimizing the financial representation, focusing on value creation and profitability. This can involve eliminating non-essential costs, streamlining operations, and managing receivables efficiently. A well-structured financial presentation can be the difference between a successful sale and a missed opportunity.

4. Ensuring a smooth transition

Finally, the CFO ensures that the transition to new ownership proceeds smoothly. This includes facilitating the integration of financial systems and preparing the buyer’s financial team. A well-managed transition minimizes risks and ensures the continuity of daily operations.

Summary

Selling a business is a strategic decision that demands meticulous attention to detail and careful financial management. The CFO, or financial leader in SMEs, is a key asset that can significantly impact the outcome of the transaction.

Overlooking the role of the CFO means potentially compromising the value of the sale and the success of the entire process.