How To Increase Your Company's Value
How To Increase Your Company's Value
Maximizing your business's value is critical when transitioning, either through sale to a third party or acquisition. Value enhancement is all about increasing profitability, cash flows and efficiency. High-value businesses fetch premium prices during a sale.
If you want to get more money, you must think of value enhancement. Even if you plan on exiting the business later down the road, enhancing its value is smart thinking.
Value drivers are the various elements that boost a business's value. They reduce risk, improve cash flows, and position your company strategically for acquisition. Below is an overview and question box of the key value drivers and key issues to consider in the transaction process.
Growth strategy can be based on several factors:
What Is Your Company's Value?
Different Question Boxes
Question box 1: Key questions about the transaction process
(1)?How do I bring interested buyers already known to me and new potential buyers into a real bidding competition?
(2)?What is the right time for my company sale during the year in my company's situation?
(3)?What resources and lead times do I need to plan for an announced transaction date?
(4)?What issues do I need to address and when for a smooth and value-maximizing sale process?
(5)?How can I coordinate the transaction process and avoid "interface risks"?
Question box 2: Key questions on M&A strategy
(1)?Which potential acquirers / acquirer groups do I focus on for my company sale?
(2)?For which investor does my company have the highest strategic value?
(3)?What are the alternatives to selling the company to a direct competitor?
(4)?What are the strengths and potentials of my company from the perspective of certain acquirers or acquirer groups?
(5)?What are the weak points of my company from the point of view of an acquirer and how do I deal with these in the sales process?
Question box 3: Key questions about the transaction structure
(1)?What tax and legal framework do I need to clarify before starting the sales process?
(2)?What is the right object of sale?
(3)?What are the advantages and disadvantages of different transaction structures for seller and buyer?
(4)?How can the transaction structure be optimized from the overall perspective of buyer and seller?
Question box 4: Key questions on the communication strategy
(1)?How can the anonymity of the object for sale or the seller and the confidentiality in the sales process be maintained in the best possible way?
(2)?Which employees of my company do I need to involve in the sales process and when?
(3)?How do I organize a site visit of the potential buyer and his consultants?
(4)?How can I protect myself from "spying" on sensitive company data and dubious practices by a buyer?
(5)?When should I inform my investors (especially banks) about the transaction?
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(6)?To what extent should I involve myself in the communication with the buyer or his advisors?
(7)?How do I deal with the buyer's requests for contact with key employees, customers, and suppliers of my company?
?Question box 5: Key questions on sales documents
(1)?How should the information about my company be prepared and optimally presented?
(2)?How can I specifically highlight the strengths and potential of my company in the sales documentation?
(3)?How do I organize the compilation of the data without causing a big stir in my company?
?Question box 6: Key questions on corporate value
(1)?What are the advantages and disadvantages of the common valuation methods in my business situation?
(2)?What is a realistic range for a sales price under current market conditions?
(3)?What are the parameters and value drivers in different valuation approaches?
(4)?To which valuation parameters are widely differing value perceptions of buyer and seller attributable?
(5)?How does the indebtedness of my company affect the sales price and what room for negotiation exists?
(6)?How do synergy effects between buyer and seller flow into the valuation?
(7)?What influence does the transaction structure have on the valuation and the achievable sales price?
?Question Box 7: Key Due Diligence Questions
(1)?Who should be available to the buyer or its advisors as a contact person during due diligence?
(2)?How do I handle questions about highly sensitive company information and existing non-disclosure agreements with customers in due diligence?
(3)?How can I disclose information in the due diligence in such a way that it can be "anchored" in the purchase agreement in a liability-free manner?
?Question Box 8: Key Due Diligence and Closing Questions
(1)?What contractual agreements are necessary in the specific situation beyond the purchase agreement?
(2)?Which contractual warranties are customary and appropriate in my sales situation?
(3)?How do I avoid liabilities from weak points which are known to the buyer or his advisors from the due diligence?
(4)?Where are the "set screws" in the agreed purchase price mechanism and how can the seller/buyer influence them?
(5)?To what extent is coverage of the buyer for warranty rights and a non-competition clause on the part of the seller appropriate and acceptable?
(6)?How can purchase price payments that do not flow immediately to the seller be secured?
(7)?What happens in a period between signing of the contract and execution in rem?
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If you need professional support in business value enhancement and business sale projects, do not hesitate to contact the entrepreneurial services company SEViX. The partners of SEViX GROUP are entrepreneurs with passion.
SEViX GmbH
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81827 Munich?
Website: https://sevix-group.com
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