Excite Your Future Acquirer With An Articulated Growth Plan
A common myth among private business owners is if they show their future potential acquirer a solid history of profitable growth, this alone will drive up the exit valuation of their company. Although solid historical financial performance is the ante into the game of a successful exit, it must be supported with an equally exciting future outlook of ongoing, even accelerating growth under the ownership of the potential acquirer.
When you sell your business one day, it’s your job to excite the potential acquirer(s). It’s a mistake just to present your company to them and hope they find something to be excited about. You will have to build the messaging and the supporting case that articulates why your business is still a strong horse to ride for the future. To do this, you will want to be able to articulate very clearly what growth paths your company has remaining. You’ll want to be able to answer questions like:
- Do we have future growth opportunity within our current served market or have we penetrated this market historically to a meaningful level and growth must come by expanding the market we play in?
- What growth opportunity do we have remaining with our existing customers – have we done the best job of messaging our customers with all that we can do for them or do we provide more products or services than our existing customers are aware of?
- Could we generate new growth by introducing a new product or service and leverage existing customer relationships?
- If we feel we have maximized the penetration of our existing customers, have we identified new customers we could approach – and can we do this with our existing product or service portfolio or would we need to modify our offering?
- Do we have an effectively managed sales opportunity pipeline that continues to expand and shows additional growth ideas your company could yet pursue going in to the future?
Business owners are often surprised to hear that the majority of those selling their business aren’t happy with the outcome. Although there are many reasons behind this, we can share from our experience that a leading reason is the business is presented to potential acquirers with a solid history, but lacking clarity related to where the business still has exciting growth runway ahead of it. Position your company as both yesterday and tomorrow’s news and this will enable the potential for a euphoric exit outcome.
