Rudi Scheiber-Kurtz: Are you Maximizing your Business Value before Selling? Part 2

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Start building value today. Consider a benchmark assessment that will give you a baseline and leads you towards transformation initiatives. We call them EBITDA (earnings before tax, depreciation, and amortization) Transformations or Operational Profitability.  In a relatively short time you can improve both top and bottom line for your business.

Take care of your risks and areas of weakness today rather than have a buyer use them to decrease your business value or walk away from the deal.

Consider:

  • Develop a Roadmap using a GPS
  • Build it for 24 months addressing and fixing all the potholes
  • Have a faster drive to selling your business

Excellent resources are available in guiding your through this process.  However, the best investment you will make is hiring the right advisors to support you through this process.  Joe Marrow of Morse, Barnes-Brown Pendelton lists four key points to consider in his article “Planning for a Liquidity Event — Choosing the Correct Exit Strategy'”:

1.     Focus on Execution

2.     Be Bought, Not Sold

3.     Surround Yourself with Excellent Advisors

4.     Choose the Correct Exit Strategy

What is a potential buyer looking for?

  • EBITDA compared to annual sales
  • Customer base and profitability within products/segments
  • Processes and policies in place
  • Systems integration and optimization
  • Inter-departmental emphasis in problem solving
  • Focus on Customer acquisition and value add
  • Growth opportunity in the future market place

Is it the right time?  Is it a sellers or buyers market?  According to Jeff Mortimer’s investment statistics, it is a good time to sell and buy.  Jeff Mortimer, Director of Investment Strategy with BNY Mellon, has collected impressive data including market confidence factors, common market assumptions and the seasonality and cyclical nature of the market in any given economy over the past twenty years.

Timing is favorable also in terms of cost of capital given the low interest rates. Quantitative Easing will be most likely eliminated and we will start to see an uptick in interest rates.

The window is NOW if you are contemplating selling your business. Start today and give yourself the time you need to eliminate your weaknesses and risks.

And one more thing!  Doing it alone is not a good option, so finding the right advisor will be one of the most important investments you will make.

Originally posted by Rudi Scheiber-Kurtz on September 2, 2014 at 8:30pm

Updated: May 1st, 2021

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