Selling your business? You Need a Strategy!
We recently attended a meeting with a panel of esteemed professional advisers speaking to the critical steps leading up to exiting your business. They spoke about the importance of quality of earnings, revenue growth, operating margin, cash flow and diversity of customer base as key measures to maximize value. While these measures are important in preparing a company for sale, we were struck by how the panel touched only lightly on the importance of strategy management. Although the numbers are important, having a strategy, an execution plan, and a management team capable of executing the strategy are all equally important.
Whether the potential acquirer is a financial or strategic buyer, the value of your business will undoubtedly be worth more if you have a clearly articulated strategy and plan in place to implement the strategy that will tell the story about how you will achieve the value of your long-term vision.
The strategy is the road-map that frames the company’s sustainable competitive advantage and confirms the management team’s alignment. A company with a strategy execution plan and proven track record of achieving its targets and milestones provide a great deal of confidence to a potential buyer and significant value in the final negotiated price.
When preparing for an exit, consider these important points:
- Start your planning 3 to 5 years before you begin the exit process. Don’t wait until you have an offer on the table to call in the experts. Select your team of advisers and begin the process of preparing the company for sale, including the strategy and execution plan.
- Prove to the potential acquirer that your organization has the capability and capacity to implement the strategy and get results.
- Establish a strategy execution management process to demonstrate that your organization knows how to make strategy happen.
- Establish the KPIs (Key Performance Indicators) that will measure and monitor your organization’s performance toward the achievement of the strategy.
At Albu Consulting we have helped dozens of companies over the years develop robust strategies and establishing strong strategy management execution processes. We would be happy to discuss how we can help you maximize the value of your organization.