Think differently to maximize the value of your business
There are two ways to sell your business: the traditional method or our refreshingly different approach.
The traditional method
Business owners often miss the opportunity to maximize the sale price of their businesses because they rely on corporate finance advisors and institutions, businesses which are built around a core strategy of excelling in financial matters – but not in actively marketing and selling companies. These organizations may be able to offer sound financial advice and guidance but when it comes to valuing and selling a business their methods are traditional and outdated. Financial organizations value a company on return on investment criteria only and provide little in the way of proactive marketing and selling. Traditional methods make it easier for financial advisors to settle on a value based on historical data or the values placed on what may seem to be similar companies in the past. However this method does not account for what the market will bear, the future potential of your company when combined with the acquirer’s, if your company has good products and services, clearly defined distribution channels, desirable clients or future potential.
Our refreshingly different method
There are two types of potential acquirer, those simply seeking a quick return on their investment and those seeking to improve their own businesses’ profitability, the profitability of the business lines brought by the company they are seeking to purchase and their own organic growth. The latter are known as ‘strategic acquirers’ and it is these acquirers that we actively target when helping our clients achieve a maximized sale price for their business. We target these strategic buyers because strategic buyers can and do pay more.
Strategic buyers are those which are looking for a business which is complimentary, i.e. one within the same market area and one which offers similar, but not competing products. The benefit of this is that, with the two businesses working together, the acquirer can market its products and services to the seller’s customers and the seller’s products and services can be marketed to the acquirer’s customers. Through cross channel distribution, each company has the ability to significantly increase profitability from the moment they become one. This is the overwhelming reason why strategic acquirers invariably make higher offers than those whose valuations are based purely on return on investment criteria.
Strategic buyers also consider company history, future growth, past performance, assets, strengths and weaknesses, financial summary, purchaser profile, staffing, products and services and product/service benefits. They are willing to pay more because they can do more with your company in the future.
Take a look at what influences successful business sales.
