When preparing your business for sale, don't just focus on EBITDA and don't forget cash flow

At M&A Advisory, we specialise in supporting marketing communications and consulting businesses through the sale process. One overlooked value driver is strong cash flow management.

Here’s why it matters for your M&A transaction:

Buyers expect you to leave behind enough cash to support the normal operating requirements of the business. This amount is negotiated during due diligence and becomes a part of the final deal. 

Excess cash above operating needs typically gets paid out to the seller on completion day. That means, with careful planning, strong cash management can give founders a valuable extra top-up to their sale proceeds, which can be tax efficient.

In the lead-up to a sale, founders should take a closer look at:

- Client credit terms
- Invoicing procedures
- Credit control discipline
 

A key metric to keep in mind?

Operating cash flow should ideally be around 80-90% of operating profit.

Ask your accountant or FD to track this ratio, it’s a powerful indicator of financial health and sale-readiness.

If you're considering a sale in the next 12–36 months, now is the time to start optimising.