Focusing on 3 areas could have you on a path to a future euphoric exit
Preparing your business for a future successful exit requires you to get many pieces of the puzzle placed properly. But all the puzzle pieces needed to sell your company aren’t all equally weighted. There are 3 that rise to their own level of worth creation and therefore warrant special attention.
Predictable Revenues – there are generally two types of businesses. Those that are confident that future orders are coming but not sure when. The other is a business that knows clearly when the orders are coming. These businesses have a go to market model that makes it very clear when the orders are coming. The predictable revenue model will command a higher valuation at time of company sale than the transactional revenue one. Here are just a few ways companies build predictable revenue models – establish customer purchasing agreements, receive customer provided forecast, offer a product or service that is subscription, license or recurring revenue model based.
Pricing Strategy – too many businesses are lacking in a well thought through pricing strategy for their portfolio. Some either lack a strategy entirely or their pricing strategy is a one size fits all. An effective pricing strategy is one for each part of their portfolio and for each customer segment. Putting your company worth on steroids occurs when you can show that your business (for some or all your products and services) commands a unique position in the market and customers see a unique value that they are willing to pay you a premium for and even willing to periodically absorb price increases without causing significant attrition.
Customer Stickiness – too few leadership teams spend time discussing how to increase their stickiness (or customer loyalty). The expression is don’t look to be the best at something, look to be the only. What services or products does your company provide today that make customers sticky with you and what additional ones could you provide to increase that stickiness? Customer stickiness isn’t a nice to have, it’s a must have for driving up the worth of your company. So don’t leave your stickiness to chance, have a plan for building it.
Ask yourself – is my team working on the right puzzle pieces for building the worth of my company? Spending time on these 3 worth drivers will pay you the greatest current and future dividend. Use time as a friend in preparing your company for a future euphoric exit event – ensure the preparation includes addressing these 3 investments that deliver the best returns.
