Sellers are better positioned to optimize their assets than buyers in the first 6 months following a transaction; and it pays
Sellers often underestimate the financial impact that simple and quick (3-6 months) improvements can have on a transaction. Sellers necessarily know their business better than a potential buyer and can significantly optimize their assets before their sale. This is not different from cleaning a house before putting it up for sale. It always pays.
Here are some quick items to review before putting up a business or corporate assets for sale.
Review the strategy
No buyer likes to acquire a business going nowhere. Sellers need to underline the true potential of their assets for prospective buyers. A well articulated and positioned strategy can make a difference in the minds of most buyers.
- Create a well thought-out IP strategy
- Quantify the true potential impact of the assets in the market in the next 3-5 years
A thorough review of the company's Go To Market (GTM) strategy can pay off.
- Optimize the company's brand in the marketplace.
- Tweak the GTM strategy to improve your return on investment
- Map out existing distribution channels and maximize high margins channels
- Implement a thorough E-Commerce strategy
- Fetch key client feedback to uncover hidden low-hanging fruit
Taking a step back and reviewing logistics may not be high on an executive's "to-do" list, however, clients invariably discover better and cheaper ways to deliver their value proposition when they review operations.
- Ensure that processes are LEAN
- Renegotiate old agreements with suppliers.
- Map out processes to discover inefficiencies
Minimize your costs
Cost cutting is a highly strategic activity that is under-estimated because it is rarely associated with growth. Cutting costs at the right places can tighten up a company and deliver profits straight to its bottom line. Since many assets are valued based on a multiple of the EBITDA that the assets generate, each dollar saved can deliver significant return. Examine all costs before initiating the selling process:
- Ensure that the organization's HR is tight and efficient
- Renegotiate old suppliers contracts
- Analyse customers' price elasticity and adjust pricing accordingly
- Eliminate non-value added activities from the supply chain