Is Your Business Value Maximised?

Too many businesses don’t sell for anywhere near their potential.  So much of that is because the outgoing owner chooses to sell the business without considering the necessary improvements required to make the business attractive enough to generate the competitive tension necessary to get a great sale price.

In response to this, Groves & Partners are applying our significant commercial and transaction experience to partner with companies and their owners to optimise business saleability and valuation.

The underlying philosophy is simple.  The better the planning, the higher the value that the business sells for – and the less stringent the terms that the new owner will place on the departing owners.

Since the large payout on exit is likely to be the largest single sum of money that the owner has received, it makes sense that the selling event is planned for several years in advance of the actual sale.  This business planning takes the form of two separate but interconnected activities that together form an equation of total value.

Strengths of business assets that ensure future profitability and growth

+

Alignment with buyers’ motives that fit with their existing business

The remainder of this article will focus on the first side of the equation, the strength of your business assets. Using Groves & Partners, Fit For Sale Scorecard, business owners can determine exactly how strong their business assets are.

Financial Assets

Overall business financial management including performance tracking, ability to forecast, exercise financial control and benchmark performance.

Product Assets

Having a full product ecosystem and a capacity to generate healthy margins.  This includes service and support, add-ons, upgrades, and recurring revenues.

Customer Assets

Understanding customer needs and the capacity to develop relationships that ensure customer satisfaction and loyalty.

People Assets

The ability to harness employee motivation, productivity, positive momentum, and job satisfaction – backed by systematic and lawful procedures.

System Assets

The level of business systematisation included scalability through automated and documented processes, risk reduction and disaster recovery.

Competitive Assets

Ability of the business to sustain competitive advantage through ongoing market shifts, product innovation and competitor activity.

Brand Assets

Recognition, exposure, credibility, and ethical orientation of the business.  Perception of the community and market towards the brand.

IP Assets

Degree of formal and informal knowledge held within the business that enables business to maintain its competitive advantage through innovation and barriers to entry. 

Try Our Scorecard

To check your own fitness for sale with each of the eight assets, please try our complimentary and completely anonymous Fit For Sale Scorecard.

Written by Stephen Groves

Related

Why Do Buyers Buy?

It’s long been part of the vocabulary of M&A specialists and business brokers advising their selling clients, that the best way to maximise the sale…

Read More