STRATEGIZING FOR “THE BIG DANCE”
Having a preliminary valuation performed by a qualified M&A professional is one way for a middle market entrepreneur to identify the issues in their business that should be addressed, cleaned-up, or improved to make their business more successful and eventually more attractive to prospective buyers. A preliminary valuation analysis will identify the “value drivers” of the business as well as create metrics upon which future successes and/or failures may be quantified. Value drivers may include:
- Customer Base – diversified or concentrated
- Profitability and Growth – steady growth rates or flat and inconsistent
- Competition – barriers to entry
- Management Ability and Depth – not overly reliant on the owners/managers
- Product and/or Service Excellence
- Industry dynamics
A Strategic Plan will be established from the preliminary valuation process, and from this framework, the owner may develop the Tactical Plan to transform the business. With the deliberate execution of the Strategic Plan and 2 – 4 years of leeway, a business owner should maximize the Investment Value of their Company and create a highly-saleable business.
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