14 Jun Map Guides Business Owners to Maximized Payday
Business owners find their motivation in varied things. Commercialize a pioneering methodology. Be one’s own boss. Prove naysayers wrong. Provide a great place for people to work.
While every entrepreneur has his or her unique set of goals, virtually all share one in common — to one day sell for a boatload.
How much? Well, more is better. And so the question every business owner asks is: “What can I do today to maximize the eventual sale price of my business?”
To be sure, the answer depends on where the business is in its development and the time horizon of the business owner. But whatever the answers are to these questions there are things that can be done. Acquisition Advisors has put them on paper. A single piece of paper.
“When the goal is to get absolute maximum sale price, the task entails both building a business that possesses the characteristics desired by buyers and conducting the sale effort in a certain manner,” says David L. Perkins, Jr., managing director of Acquisition Advisors. “Our ‘Best Practice Map’ titled ‘Maximize Sale Price of a Business’ clearly and simply shows the important elements of both.”
The map format – as opposed to an article – allows a tremendous amount of information to be summarized in an easy-to-read format. The instructional “best practice” data is organized into four distinct sections. Each section is a phase in the journey that leads to the sale of the business at maximum value:
Phase 1: Build a Valuable Company
Phase 2: Plan and Prepare for Sale
Phase 3: Execute Sale Strategy
Phase 4: Post Closing
Under Phase 1, for example, two sections offer valuable guidance to business owners: “Accumulate Value Drivers” and “Eliminate Barriers to Marketability.” Listed are 18 value drivers and 11 barriers to marketability. Perkins explains, “To the extent a business owner can add the value drivers and eliminate the barriers to marketability listed, the value of his or her business will rise. Incidentally, the business will also enjoy enhanced profitability, lower risk and greater stability.”
Most of the map – indeed three of the four main sections – is dedicated to how a business owner should go about the process of preparing, packaging and selling his or her business.
“There’s definitely a right way and a wrong way to go about the sale of a business,” says Perkins. “Unfortunately, common sense does not lead the business owner down the right path. But, the lessons of experience have, over time, revealed the path that will take the business owner to absolute maximum sale price. The essential elements of this ‘best practice’ are displayed in our map.”