Management Team: Exit With A Deep Bench!
An experienced, motivated and stable management team is the most significant value driver of M&A transactions. Businesses with a strong management team focus on the sustained growth of cash flows and profitability, command higher valuations in the marketplace, and allow for the seamless exit of the owners.
In the eyes of prospective buyers, there is no greater reassurance of continued business success than a talented management team. Therefore, business owners should consider the following while acquiring and developing their team:
- Clearly defined job description, roles and responsibilities
- Documented and measurable employee assessments
- Alignment of employee goals with company goals
- Non-compete or non-solicitation agreements
- Performance incentives and stock ownership plans
Even if a business owner doesn’t exit their business for years to come or lacks a clearly defined exit strategy, a deep bench will accelerate growth, increase profits, and allow more time away from the office!