Strategic thinking can create win-win situations where you can identify far more value for certain buyers than can be achieved on a pure financial basis.
The buyer profits because he pays for only part of the upside and the seller profits because he sells at a higher value!
I am Nigel Hall from BuyGrowSell, exit strategy and business sales experts.
Let’s have a look at how to use strategic thinking to unlock your hidden business value by finding your perfect strategic exit buyers.
How do we make two plus two to equal more than 4, to get more value for your business.
Most importantly you need to understand what you are selling!
Do you have customers no-one else can capture?
Do you have a product that outperforms your competition or
that delivers a potential acquirer with a new market to de-risk its current portfolio.
Really understanding how you add value to your clients is the key part of identifying strategic buyers.
Then understanding how you differentiate yourself in the market in any other factor plays a key role.
This may be your distribution, marketing, systems, product development, customer retention or even innovative finance model.
Identify this and you are starting to unlock your hidden value.
Once you have identified these factors you then look for companies who can either build on their own strengths by adding yours or who can take your strengths to a much wider market.
Who qualifies as a strategic buyer?
Someone who will gain synergies beyond the normal increase in earnings from simply buying your revenue.
This could be:
a competitor who can remove costs and downward price pressure.
A company in a similar but complementary space but with a much larger customer base and distribution network or a manufacturer who can control more of the supply chain by owning your business.
A company who can remove your business constraints and enable faster growth, whether financial, personnel, distribution or manufacturing.
The possibilities go on and change for each potential buyer!
By identifying the advantages to each individual buyer and analysing how your business will fit into their business and customising your approach to each business, you can extract more of the potential upside and demonstrate market understanding that will aid the buyer too.