Building this muscle today could reward you at time of exit
When the day comes you want to attract and excite an acquirer to buy your company, know that they will be asking you for your forward-looking growth projection. They are most interested in knowing this because they will base some of their valuation not just on how it has performed historically, but even more so on how it might perform under their ownership. To be prepared for this, you will want your team to be able to build and present an effective forecasting muscle.
We say this because acquirers often view the seller’s projection with skepticism and will trim it down in building their valuation model. To avoid them doing this to you, you will want to prove to them that your company has a successful historical track record of planning, forecasting and achieving your growth projections. Showing an acquirer that your company has a good muscle and discipline of forecasting your business and achieving your forecasts on a mostly consistent basis, may give them confidence to accept all of or at least a majority of your forward-looking projection.
To be able to show a future acquirer that you’ve built this forecasting muscle with your business, you will want to use time as a friend and start building it today because this will allow you to improve the capability and ultimately show them a few years of positive track record.
