Maximizing Value
Maximum value is achieved when a business stands out from the competition and appeals to the largest possible audience. Preparation and planning are key to achieving that objective.
Many business owners are not familiar with the importance of preparing their business for a sale or merger. Oftentimes, this leads to significant value being left on the table.
What Buyers Look For
Business buyers are often sophisticated and employ their own professional advisors when considering an acquisition. Wood End Capital professionals are skilled at highlighting characteristics buyers seek:
– History of profitability
– Large/loyal customer base
– Competitive advantage in the marketplace such as intellectual property or exclusive distribution rights
– Opportunities for growth
– Strong management
– Market leadership
– Skilled workforce
– Clean and updated facilities
– Current and fast moving inventory
– Strong Reputation
Keys To Maximizing Value
Can changes be made to your business to increase value? Wood End professionals are experts at preparing plans showing potential buyers the impact of untapped potential:
– Identify additional revenue streams
– Exit relationships with unprofitable customers
– Liquidate excess/obsolete inventory
– Sell off under-utilized assets
– Close internal control gaps
– Settle lingering lawsuits
– Broaden the supplier base
– Implement cost reductions
– Hire employees for key vacancies
– Other operational improvements
Due Diligence
Buyers will most often hire a third party to evaluate every aspect of your business prior to making an offer. Wood End professionals know what the experts are looking for and how to present the information:
– Three years of historical profit and loss statements
– Current and historical balance sheets
– Detailed asset listings, including intellectual property
– Appraisals, bank statements, tax returns, insurance policies
– Real estate and equipment leases
– Organizational chart and management review
– Financial projections along with planned vs actual results
– Legal review – pending lawsuits, safety violations
– Customer information and competitor landscape
– Detailed product descriptions, sales history and profitability
– Capital structure