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10 ways to maximize the future selling price of your business
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10 Ways To MaximizeThe Future Selling Price Of Your Business
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Tuesday, June 14, 2011
‣ Every business should be sold or transitioned at some point, yours included. ‘When?’ is up for debate.
‣ But when that time comes, you need to have put in place a number of items in order to maximize the money you will receive from the new owner (regardless if that person is family or not).
‣ Waiting until you are ready to sell may prove to be too little, too late to maximize the value of your business.
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“Why Should I Be Thinking Of SellingIf I’m Not Ready To Sell?”
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Tuesday, June 14, 2011
‣ The right time to sell is easy in hindsight. (It was at the peak of a 5-year sales run, right before the competitor introduced a new product!)
‣ It’s hard to predict the future, knowing what that competitor, customer, or market trend will do to your sales. This is probably the most unnerving part of owning your own business!
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Its Incredibly Hard To PredictWhen To Sell The Business
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Tuesday, June 14, 2011
‣ No… the right time to sell is when your gut says you have given everything you can to making this company the best it can be.
‣ You know in your heart that someone else will be in a better position to build on your legacy long-term.
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When Your Gut Says Its TimeThen Its Time
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‣ Some companies can be sold right away, while others need a few years to put some order into things.
‣ What follows is my list of the 10 most important items you can do to help maximize the wealth you will receive the day you decide to sell or transition. 5
Be Prepared For When Its Right;Put Things In Order Starting Today
1. Do one thing really well2. Remove yourself from selling the company’s services3. Build leaders that will make effective decisions without you4. Put in place an incentive plan for the key senior most leaders5. Ensure positive cash flow
6. Create a pipeline of new products or services7. Pay down debt to a manageable level8. Have a 15 year vision and a 3 year strategic plan9. Deploy technology that leads to improved productivity10. Improve employee productivity by removing roadblocks
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Do One ThingReally Well
‣ Narrow your focus to one area of business and do that better than any other company. You can have a number of products that you make or a variety of categories that you retail, but they must all be tied to the same tightly focused theme.
‣ Provide your customers the opportunity to buy repeatedly, giving them choices to move up from ‘incredibly affordable’ to items that cost more, but come with additional added value.
6
Number
1
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Tuesday, June 14, 2011
Remove Yourself From SellingThe Company’s Products/Services
‣ The owner of a business must not be the same person who sells its products or services. If this were the case, why would I want to buy your business? I would have to keep you as my sales leader and you and I probably don’t want that!
‣ Remove yourself from selling and doing the work, instead focusing on influencing your strategy, people, and productivity. Your role now, more than ever, is to build future leaders who will carry on without you.
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Number
2
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Tuesday, June 14, 2011
Build Leaders That Will MakeEffective Decisions Without You
‣ Coach your leadership team to make decisions without you. Yes, you still need a say in high-risk situations, but the day-to-day operations must be theirs to manage.
8
Number
3
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Tuesday, June 14, 2011
Put In Place An Incentive PlanFor The Key Senior Most Leaders
‣ Smart employees start to sense when you are preparing to sell your company. They feel a shift in how you go about things.
‣ While you must deny the company is for sale publicly, you can and should provide the most important leaders with an incentive to stay with the company through the transition, and for up to 3 years after.
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Number
4
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Tuesday, June 14, 2011
Ensure PositiveCash Flow
‣ Buyers pay more for companies with positive cash flow. Do as much as possible now to reduce the days outstanding on receivables or even charge up-front for services.
10
Number
5
collect soonerincrease sales
reduced cost of goodsreduce expenses
charge up-front
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Tuesday, June 14, 2011
Create A Pipeline OfNew Products Or Services
‣ What a joy it would be for a new owner to have products ready to launch. The value of this future revenue increases their ability to pay a higher price, driven by a greater confidence in the ability to get a return on their investment.
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Number
6
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Pay Down DebtTo A Manageable Level
‣ The less debt the company has, the more valuable it is to a buyer. Money the new owner is prepared to invest can then go directly to sales and marketing initiatives that will deliver increased profits sooner, vs. being required to reduce debt load.
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Number
7
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Tuesday, June 14, 2011
Have A 15 Year VisionAnd a 3 Year Strategic Plan
‣ In most cases, the current owner can do a better job of painting a picture of the opportunity than a prospective buyer because of the intimate knowledge you have of the company and industry.
‣ Show the prospective buyer what great looks like and they will pay for the opportunity to make it a reality.
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Number
8
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Deploy Technology That LeadsTo Improved Productivity
‣Technology is a catalyst to increased profits because of how it improves productivity. It can be a piece of manufacturing equipment or software that helps track customer purchases; in both cases, the net benefit is improved efficiency.
‣ It is best to steadily spend on technology over the years so there is no one-time major expense. Future buyers appreciate the attention given to efficiency and will feel more comfortable paying for its steady deployment.
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Number
9
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Tuesday, June 14, 2011
Improve Employee ProductivityBy Removing Roadblocks
‣ While this is the last of the 10, it is no less important than the others. The more productive your employees are, the happier they are with you as their manager and the company. This translates into reduced turnover, more discipline, better ideas, and faster execution – all leading to improved profits.
‣ In the due diligence step of a sale, the buyer can sense if people are productive or not. Make the necessary changes now by asking your people what is keeping them from being more effective and then acting on their suggestions.
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10
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Tuesday, June 14, 2011
When The Time Is RightSomeone Else Will Build On Your Legacy
‣ Selling or transitioning your company is the natural and right thing to do. It maximizes your wealth, while continuing to provide jobs for your employees that help feed their families.
‣ Feel good about this transition and look forward to doing something different with your energy, time, and wealth. You have earned it!
Cue the music, please!
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Tuesday, June 14, 2011
‣ I believe being a trusted advisor involves listening first. The more I seek to understand your business and what you are dealing with, the richer the dialogue becomes. I have a friendly and engaging work style that is balanced between asking questions, challenging, and providing solutions for you to consider.
‣ What I don’t do is make decisions for you. Our conversations are designed to stretch your thinking, for me to be a sounding board, and most importantly, a catalyst for you and your company’s growth.
Lead With Your Entrepreneurial SpiritWhile Accessing Breakthrough Solutions
Jeff Haltrecht | family business advisor
About the
author!
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Tuesday, June 14, 2011
Treating You With Respect,While Challenging For Better Performance
‣ When applied correctly, values guide behaviour and set the tone for interaction between people. Here is what you can expect when we work together:
‣ Treating you with respect
‣ Challenging for better performance
‣ Helping you be internally driven
‣ Putting ideas to action
‣ Embracing change as the path to opportunity
‣ Communicating candidly
‣ Delivering results
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Strategic Thinking
Leadership
Developm
ent
MarketingInnovatio
n
ExceptionalExperience
Jeff Haltrecht | family business advisor
About the
author!
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Tuesday, June 14, 2011
Products
A Safe And Private PlaceTo Have A Proactive Discussion
‣ Helping small to mid size business owners realize wealth within the company so that when you choose to transition or sell sometime in the future, the business is valued at the highest price possible.
Strategic Growth PlansBuild your business with powerful yet simple
strategies that add to company wealth
Family Business AdvisorWorking one-on-one, we take a solid look at
your strategic plan, leadership style, and management productivity, all with the intent of helping you realize value within the company
BoardSmarts™Designed to give the senior leader(s) their own
team of seasoned advisors who focus on providing solutions, while being a catalyst for
leadership development and long-term business growth.
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Tuesday, June 14, 2011
‣ WEB & BLOG
‣ PHONE - 905.601.0311
‣ OFFICE - Oakville, Ontario, Canada
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Have A Terrific Day!Contact Information
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Building Company WealthTM
Tuesday, June 14, 2011
![ASA-CICBV Business Valuation Conference Deferred Revenue ... · Power Holdings, Inc] ... party’s stand alone selling price, management’s best estimate of stand along selling price,](https://img.pdfslide.net/doc/110x75/5fb0e86061ef096cc67e2d76/asa-cicbv-business-valuation-conference-deferred-revenue-power-holdings-inc.jpg)
