Grooming Your Business
Business Improvement Strategies
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 whether you transition out or not.
Extraordinary macro and demographic events cause market distortion – in this case, the supply of businesses on the market at any one time over the next 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?
Even if you do not sell your business, there are different methods to transition out of business. 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. You need to focus on creating acquisition attractiveness. Remember, “Good is the enemy of great.”
Buyer expectations for performance will elevate. You need to actively enhance value and improve sales and marketing, production, process and procedures, financial management, and talent management. Can this business 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. You need to actively manage business risk.
Preparation begins with discovering the areas of your business that will groom your business and provide the most value enhancement.