Creating Value in Your Business

A happy ending for a business owner can take several forms. Getting a good price and finding a buyer where employees keep their jobs are two items that often make sellers happy. However, before the happy ending there must be a beginning, which typically starts with buying an existing business or building a company from scratch. If all goes well, the business will meet the owner’s financial needs and provide fulfilling jobs for the employees. Then, when the owner is ready to step away, the business is sold for a great price.

A great price is the result of the owner building a sustainable businesses that is attractive to a buyer. A sought-after company will be one that:

Prioritizes innovation: Continuously look for ways to stand out from the competition with improved products, processes, and services. Owners and leaders can do this by creating a culture of innovation – one that allocates resources towards and provides opportunities for growth and development.

Tracks Performance: Regularly track and monitor key performance indicators (KPIs) to have a clear picture of where the business is at and identify areas for improvement.

Utilizes independent expertise: Hire an independent expert to interpret the KPIs and data collected. An outside perspective will provide fresh ideas to improve efficiency and profitability.

Focuses on talent: Develop a strong talent management strategy that leads to finding, developing, and retaining high-performing employees.

Pursues growth: Look for opportunities to grow – organically and inorganically. Organic growth comes from optimization, increasing sales, or new products or services. Inorganic growth arises from mergers and acquisitions.

Evaluates qualitative factors: These include workplace culture, employee benefits and satisfaction, and brand reputation.

Considers the future: Create an exit strategy well before it is time to sell.

Protects the company’s value: Utilize a team of experts to protect and mitigate risk. This may be the company’s attorney and CFO along with a board or outside party to give periodic feedback and guidance.

If value creation has not been top of mind from the start of your business, don’t panic. You still have time to implement these strategies if you are not exiting your business soon. If you are ready to sell and are concerned about the value of your business, an experienced M&A advisor can help bridge the gap between buyer and seller expectations. If you are considering selling, now or in the future, we would be pleased to hear your business story and develop a plan for a happy ending.