Most private companies have an opportunity to double their value over a 3 – 5 year period by adopting a disciplined approach to reducing risk and increasing quality. A preliminary valuation performed by an experienced M&A professional will identify many of these “risk areas,” and may be used as a road-map to strengthen the business, prepare it for long-term growth, and maximize its sales value.
As a general framework, consider the following:
- Planning – strategic planning, target market, competition, product/market development
- Leadership – board of directors, senior management team, corporate culture
- Sales – team, strategy, operations, projections, geography served, customer base
- Marketing – team, strategy, positioning, branding, financial resources
- People – organizational structure/strategy, incentives, policies/procedures, scalability
- Operations – team, strategy, efficiencies, supply chain, quality assurance, scalability
- Finance – team, strategy, sustainability, balance sheet, internal controls
- Legal – litigation, intellectual property, contracts/agreements, licenses, filings
The most significant financial transaction of an owner’s life may be the sale of his/her company. Early planning for maximizing the sales value of a company is the first step in a successful exit plan.