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How to Build Value When Exiting Your Company

Strategic planning, business development, search for new markets and opportunities.

Almost all business owners will eventually leave; whether they sell, close, or ultimately leave the business to an heir. A business sale may be the most important transaction you’ll ever undertake, with the possibility of building real wealth. Value is something you build over time, not something you suddenly prioritize at the negotiating table or a few weeks before a sale.

The more time you have to grow value, the more likely you are to get a premium sale price and favorable deal terms. So how can you ensure you get maximum value for your business when you elect to sell? Most businesses aren’t doing it. Their owners are distracted, too emotionally invested in their vision of the company, and too overwhelmed with the myriad challenges of daily operations.

Here are the areas where businesses can make the greatest improvements to increase asking price:

Finances: Are your financial reports in order? Can you provide comprehensive, insightful, and accurate financial reports during due diligence? Buyers will want historical sales and profitability data by month dating back several years. To reach premium value, you will also need projections for the next several years. You cannot give a realistic assessment of your business’s true worth without accurate financial reporting.

Personnel: Are the right people in your company, and are they in the right places? The people who work at a business are what set it apart. The more good people there are, the more valuable the business will be, especially if you can prove that your people generate revenue. If you have family or friends on your payroll who are a poor fit or who do not pull their weight, consider replacing them. That’s doubly true at the management level, where a professional management team can change the course of your business.

Founder involvement: It’s easy to get entangled with your business such that you can’t tell where it ends and you begin. But when the owner is excessively involved, it’s difficult for the company to thrive in their absence. Owners position themselves for a more lucrative sale when they make themselves dispensable. Begin preparing your team to operate the business without you.

Expert insight: Your in-house team likely lacks the expertise necessary to truly shepherd your company to s successful sale. Invest in a team of exit advisors who can see your company from a fresh perspective and help guide it through a lucrative sale. The earlier you involve this team, the better, because early involvement of your team can help grow business value and identify areas of weakness.

Operations and processes: Do you have strong protocols and infrastructure to ensure growth? Your house needs a strong foundation to remain functional. So too with your business. You must invest in assets that may not show on the balance sheet, but which affect items that do, including:

  • marketing and advertising
  • updated manuals and processes
  • business systems

The first step in working with Strategic M&A Advisors is to contact us to schedule a confidential, no-obligation (and no-cost) conversation at a time and place that’s convenient for you. This will enable us to learn more about your business and your M&A goals while explaining how we can help you achieve your goals.

About Strategic M&A Advisors

Business sales come in all shapes and sizes. At Strategic M&A Advisors, we can help you determine the most advantageous option for selling your business. We handle all types of merger and acquisition transactions, from outright sales to investment options to grow your business. The first step is an evaluation of your business and goals to determine the best path to get the results you desire. If it is the right time to sell, we will assist you in finding vetted buyers or investors and getting the best price and terms for your transaction.

Posted on behalf of Strategic M&A Advisors

Contact us

    Mississippi office

    1062 Highland Colony Pkwy Suite 125
    Ridgeland, MS 39157


    (601) 714-2777

    (601) 675-4449

    [email protected]

    Arkansas office

    8201 Cantrell Road, Suite 315
    Little Rock, AR 72227


    (501) 588-8855

    (601) 675-4449

    [email protected]

    Arkansas (501) 588-8855 Mississippi (601) 714-2777