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Inventory Transferability & Value | Run it Ready to Exit | Business BeyonDIY | Episode 006
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If you’re running a product-based business you’re dealing with inventory. Inventory management has a direct impact on the profitability of our business.
How easy it is to transfer not only our physical inventory but the processes, sources, and relationships that power our inventory will have a direct impact on how the value a potential buyer will place on our business.
At first glance, you might think inventory is one of the easiest parts of a business to put a number on when you’re getting a business ready to exit.
Or is it?
Do you use the balance sheet value?
Maybe you should use the retail value?
What about the liquidation value?
Will the buyer be able to source material at the same cost?
How does shelf life impact the value of your inventory?
What resources are required to store it?
Maybe it isn’t as simple after all.
Even though it isn’t as straightforward as you might think at first, understanding the bigger picture of inventory can help you assign an accurate value to the inventory in a transaction.
More importantly when you’re running your business ‘ready to exit’ you can take a few key steps to make your own inventory management easier and provide evidence to your buyer that critical elements of inventory management are transferable to new ownership.
This reduces the short-term risk of supply/production interruptions during the transition between owners and provides confidence in the long-term availability of supply.
Today we'll talk about:
Inventory Value
Sourcing
Storage
Watch the livestream recording on YouTube: https://youtu.be/aVGaVm3YA9Q
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