MAY JUN 17

F I N A N C E
Maximising the value of your business
As a business ow ner, deciding t o sell your com pany is t he m ost im port ant
business decision you w ill ever m ake. Aft er years of hard w ork, you obviously
w ant t o get t he best price for your business w hich is w hy you need t o plan your
exit carefully t o m axim ise value, w rit es Robert Jones.
Below are some key factors,
in increasing priority, that
make businesses more
sellable in the eyes of
acquirers.
- Management team ?Your
existing management team
may want to explore the
possibility of buying the
business from you. A
complete and experienced
team creates options for
you whereas an incomplete
one either indicates actions
prior to sale or determines
the need to sell on a
synergy basis.
- Independence ? your
business is not reliant on
anyone and independent of
others which reduces the
risk of other factors
influencing the success of
your company.
- Scalability ? it is critical to
acquirers that your business
can grow as they will
assume you have managed
the business to maximise
value in the run up to sale.
- Recurring revenue ?
receiving recurring revenues
from customers whether it
is contracted annual
revenues such as
maintenance, or regular
income from recurring
customers provides a
certainty of income to
potential acquirers. It also
improves funding status
with banks for the buyer
which open up potential for
higher pricing.
- Customer concentration ?
It needs to be carefully
considered if your top two
customers add up to more
than 40% as income risk will
be higher.
- Low market share ?
although it sounds
counter-intuitive, low
market shares suggest the
business has a good
potential to grow in new
geographies or markets.
- Company size ? this is
really all about recognising
when the business has
outgrown you. It can be
considered as an
opportunity for an acquirer
to grow the business to the
next level.
- Industry growth ? a rising
tide lifts all boats but you
have to be able to exploit
the market advantages that
are created.
- Profitability growth ? it is
an absolute key driver to
value. A business with a
potential to grow rapidly in
terms of profit is always
valued more highly than a
business with a steady
profit year-in-year out. It is
down to many factors not
least confidence in your
offering but also validation
by an increasing market
awareness.
- Scarcity/IP ? it doesn?t just
mean technology and can
be a process, market
position, licence to operate
as well as innovation.
As experts in sell-side
advisory, our corporate
finance team can help you
prepare your business for
sale and lead and advise
you through the process
from early stages to
completion.
0151 422 9977
rob@moneymatters
inwidnes.co.uk
moneymattersinwidnes.co.uk
www.moneymattersinwidnes.co.uk
OUTSTANDING
ACCOUNTANCY
ADVISORS
4 Whitworth Court, Runcorn, Cheshire
WA7 1WA
0151 422 99 77
hello@moneymattersinwidnes.co.uk
Get in touch today for your free
1 hour consultation to see how
we can help you
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