Maximise the sales value of your business

The value of a business is what someone is willing to pay for it. However, different people have different perspectives with different purposes and motivations.  A buyer who has a strategic purpose who believes he can derive more future benefit from buying the business, is a buyer who will probably be prepared to pay more than someone else.  So the selling strategies adopted are of vital importance in terms of maximising sales values.

Buyer perception is also very important - if it looks good, appears reliable, has good future potential and fits what the buyer is looking for, then the probability of a sale increases, as does the price the buyer will pay. It follows that presenting the business in an attractive way, whilst removing any barriers to a sale, is key to achieving maximum sales value.

When it comes to the actual price negotiation, the buyer will be influenced by the level of current profitability and whether this is on an upward path.  If it is, the sales price achieved will probably be higher.  If enough time exists before selling, it is often possible to use cost reduction and profit improvement techniques - a specific CMR service - to increase the apparent profitability and therefore the eventual sales price.

Another important influence on the sales value achieved will be the level of buyer competition. Although only one purchaser is required, the ideal situation is where several buyers fight to win.

A further method of enhancing the eventual sales price achieved is to consider selling the business to external executives who want to take over the running of the business themselves.  This is called a MBI - management buy-in. Although these are usually structured on a part-payment now with earn-out payments over a defined period or a progressive sale, the eventual price paid can be considerably higher.  Sometimes a MBI purchase will be combined with existing employees of the company, in which case it is called a BIMBO (Buy-In Management & Buy-Out) and this is generally a preferred structure for external funders

In summary, many significant factors influence the maximising of the eventual sales value achieved.  All need to be considered as an integral part of the sales process.  CMR will guide sellers through this maze of options to achieve the best final result.

To discuss further - please contact CMR by phone (0207-636-1744) or email to cmr@cmruk.com or complete this online form.