Part 2 of 6: CLEAN™ Exit-Readiness Series

Missed Part 1? We introduced the CLEAN™ framework and scoring system for exit readiness.

“We were always focused on our profit and loss statement. But cash flow was not a regularly discussed topic. It was as if we were driving along, watching only the speedometer, when in fact we were running out of gas.” — Michael Dell, Founder & CEO, Dell Technologies

Cash flow isn’t just a financial metric—it’s the lifeblood of your business and one of the first things buyers scrutinize.

Too many owners fixate on profitability but ignore how working capital—the money tied up in receivables, inventory, and payables—can silently strangle their liquidity.

🔍 What Buyers Really Ask “Can this company grow without running out of cash?”

If customers pay in 60 days, vendors want payment in 15, and inventory sits for weeks—your business is heading for a cash crisis, even if it’s profitable.

🧮 The Cash Conversion Cycle Days Sales Outstanding + Days Inventory Outstanding – Days Payable Outstanding = Cash Conversion Cycle

Benchmark targets:

• Excellent: Under 30 days
• Good: 30-60 days
• Concerning: Over 90 days

✅ What Scores High in CLEAN™ Cash Flow (6 points possible)

• Short, efficient cash conversion cycles (under 60 days)
• Vendor payment terms that support growth
• 3-6 months operating cash reserves
• Rolling 13-week cash flow forecasting
• Receivables collected within 30 days
• Well-managed inventory turnover

📌 This Week’s Action Steps

1. Calculate your cash conversion cycle — What’s really happening between sale and payment?
2. Build cash reserves — Aim for 3-6 months of fixed operating costs
3. Implement 13-week rolling cash forecasts — This is how smart acquirers manage liquidity
4. Renegotiate terms — Incentivize early payments, extend vendor terms

📊 Quick Self-Assessment: Rate yourself 1-6 on cash flow management. Where do you stand?

📩 Want to know how buyers will view your cash flow? Message us for a free CLEAN™ Scorecard review.

💡 Need Help Beyond Assessment? Cash flow challenges are fixable—we’ve solved them in our own businesses and helped dozens of clients do the same. Whether you need help with:

• Working capital optimization strategies
• Banking relationships and credit facilities
• Cash forecasting systems and tools
• Accounts receivable management

We can either guide you directly or connect you with our trusted network of financial specialists.

Next week: Leadership — Why being indispensable is the worst thing you can do when trying to sell.

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