Relay Advisors

ASSET OPTIMIZATION

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

Optimize commercialization

 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 

Improve operations

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 

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