Grooming Your Business
Business Improvement Strategies
What are the strengths and weaknesses of your business?
The difference between security and obscurity may be razor-thin. A well-planned strategy and pre-divestiture/value enhancement program can grow and protect the value you worked so hard to build. Successful strategic planning requires following a process. Skipping steps almost always leads to sub-par results. There needs to be time for research, brainstorming, analysis and documentation.
Extraordinary macro and demographic events can cause market distortion. In this case, the supply of businesses on the market at any one time over 5 to 10 years will very likely exceed demand. While the number of businesses expected to be in transition may vary during each of the peak years, being prepared is paramount.
What does all this mean to you?
Cash flow or the potential for future cash flow is essential to value creation. Positioning the business to generate cash flow, now and in the future, provide alternative methods of transition.
Great businesses get noticed. Good businesses may be overlooked in a crowded market. A business owner needs to focus on creating acquisition attractiveness. Remember: “Good is the enemy of great.”
Buyer expectations for performance will elevate. A business needs to actively enhance value, improve sales and marketing, increase production, improve process and procedures, become savvy with financial management and acquire and maintain top talent. In other words, have you positioned your business to be able to operate without you?
Buyers may dictate the timing of your exit. You may not have total control. Readiness is critical.
In a buyer’s market, due diligence and contractual demands on the seller intensify. Business owners need to actively manage business risk.