But you do need to make it very special in key areas – know what they are
Some private business owners are surprised to hear that they don’t need to build the perfect business in order to one day sell to an acquirer and receive a premium payout. It seems counter intuitive to say this but here is the reason. The acquirer wants to know there is runway left with your business to take it somewhere even greater under their ownership. If they believe you’ve maximized it and they don’t have the ability to take it further, then why would they pay a premium for it?
But what you will need to do is build the right parts of your business to attract, excite and command a premium value. The key is determining which parts of your business are most critical for one day commanding a premium exit payout. This is not something you want to guess at. This is a question that can be answered years prior to trying to exit. Questions like:
- Will an acquirer value my capabilities or my customers or both?
- Will an acquirer expect that I’m serving specific types of markets or customers?
- What levels of financial performance at a minimum will an acquirer expect from me?
- What type of sales opportunity pipeline will an acquirer expect to see?
- Will an acquirer need all my employees or just some?
- Will an acquirer want my facility/s?
- Will an acquirer expect that I have specific intellectual property?
This list could continue but the point is, don’t guess. You can get guidance to these questions years prior to exiting and doing so will enable you to know which specific areas of your business you will need to build to strong levels and which parts of your business less so. Look to build a business that will excite a future acquirer (even multiple ones) and know what it will take to do so, don’t guess. Call us (949.874.0787) and we can get you started on the steps to take to greatly enable your journey to a future high company valuation and euphoric exit event.
