How to get five times the price for your business in the next two years? – Start planning now!
Its a bit like having to paint the outside of the house, there always seem to be more important priorities. So, business exit & succession planning is always something we can put off for another year. Unfortunately this is why, when the time finally arrives to sell-up, most businesses we meet undersell themselves. Tragically these owners lose the one opportunity to capitalize on a lifetime of hard work and investment.
What you need to know is that the key to making your business an attractive proposition is to start early. To this end, start your preparations by embedding real value in the business two or three years before you want to exit.
Three common handicaps to getting a high price
At the critical point of sale, we see three major problems create disappointment time and time again. Check these out, are you making these fundamental errors?
- The business lacks a strategic plan that put the business’s prospects in the best light. The business cannot show evidence that there is a winning strategy that has the buy-in and support of everyone in the business and that there are on-going, robust and realistic action plans forecast to make measurable improvements and grow the business profitability.
- Unless companies have undergone a structured programme of business improvements, they are usually unknowingly inefficient. When this is the case there is a lot of waste and unexploited potential. With Hoshin Kanri planning you remove these constraints. The net result is that sales, margins and profits soar. Rising profits greatly increase your capital value sometimes by a factor of three to five times.
- The business is still far too dependent on the existing owners. This factor alone increases the risks for anyone taking over. And this crucial fact reduces the price buyers are willing to pay. In these circumstances, the business is unable to demonstrate that it has the potential for continuity. In other words, there is no coherent management structure visibly able to maintain the competence of the business processes without your personal intervention
With careful advance planning that overcomes these drawbacks, you can achieve a realizable price for your business at least five times the current one.
Business exit & succession planning has to demonstrate the future potential of the business.
Our Hoshin Kanri planning programme is designed to help you remove the above key problems that hold back your sales price.
- Hoshin Kanri helps build strategic capability by developing an effective management team capable of taking over from the current ownership without letting things slip.
- An existing track record of business improvement implementation with demonstrable increases to sales, productivity, margins and overall profits,
- On-going action-plans aligned with a well-thought through strategy that identify weaknesses, waste and problems and then provide detailed countermeasures.
The impact of Hoshin Kanri improving each of these three factors provides a highly attractive proposition to prospective buyers and so multiplies your capital value by three or five times.
Want to learn more about business exit & succession planning? Click here to download our white paper on Hoshin Kanri or contact Jeremy Old on 0845 0945 819. Email [email protected]
You are in safe hands
Jeremy Old has twenty-five years experience as an independent management coach to small and mid-sized enterprises and non-profit organisations. He has facilitated 54, strategic change or business improvement assignments across a wide range of industry sectors. Using Hoshin Kanri he yields an estimated average 33 : 1 ROI for clients. He is qualified to MBA level, with a post-graduate diploma in psychotherapy.
Jeremy is also author of ‘Reinventing Management Thinking; using science to liberate the human spirit’. This groundbreaking management manual focuses on the role stress plays in reducing productivity and profits in the workplace.