Identifying your model to build company worth
The future acquirer of your business will start by learning about your historical financial performance. But equally, or more important to them, will be your future growth potential. A key part of exciting an acquirer is to show them you have a well thought through growth plan that will continue the success of your business for years to come under their ownership. By asking the right questions, you can identify and summarize your company growth strategy in one word.
Ask yourself this question: To accelerate the growth of my business, do I need to expand my market, increase my product/service offering, expand my company visibility to potential customers or improve my business win rate? These are your four options.
Market: expanding your business to serve a broader or new market is one of the four options your company has. If you currently possess a high market share of the current market you serve, growth may have to be found by repositioning your business to serve a larger portion of your current market or jump to a near neighbor market.
Product/Service: adding a new product or service to your portfolio is a viable option for accelerating growth. If you have loyal customers, this may be a ready-made market for you to introduce additional products or services to. And a subset of this growth option is to update your pricing strategy. Developing a new pricing strategy for your current product or service may be a driver of new growth.
Presence: is your company brand and capabilities visible to all the possible customers that have need for your product or service? If there were just two buyers in the market buying your type of product/service and only one of them knew of your company, then your market presence would be just 50%. If you can get your company visible to the second buyer, you would have a meaningful new growth opportunity. Now extrapolate this same concept to your dozens, thousands or millions of customers. What percentage of potential customers are aware your company exists?
Win: this fourth growth option relates to taking steps to increase the success rate your company has when chasing new opportunities. Out of every 10 opportunities your team pursues, how many do you win? If your win rate is low, discuss with your team what steps can be taken to increase it. Your company may not need to invest time and money in new leads, you may just need a better win rate on the work you’re already pursuing.
Growing your business is a complex matter. But with the right planning process, you can identify which of these growth options would best serve your company and help position you with an enabling future growth model that will excite a future acquirer. Give us a call (949.874.0787) and we can give you tips on how to determine which one of these growth options will help you build the worth of your company.
