EBITDA+ Information.
Control the information. Improve the sale process and price.
This is the third post in our series outlining Morgan Shaw Advisory’s, EBITDA+ SIX STEPS TO SUCCESS™. Our proven methodology for successfully selling a business and enabling business owners to engineer their own $30 million exit.
Whilst already a well-established financial metric, also widely used to value businesses, in this context EBITDA+ SIX STEPS TO SUCCESS™ stands for:
Information
The Deal
Due diligence
After the event.
When it comes to selling your business, preparing and sharing information is a frequently underestimated area in the process. And at MSA we’ve found there are generally two approaches to providing a potential buyer with information about your business:
Prepare a comprehensive report early in the process, clearly detailing key aspects of the business, or
Wait for the potential buyer to request information, based on their process.
Here’s why we strongly recommend option one, taking the initiative and investing the time and effort to fully prepare the information well in advance:
You can control this critical part of the process
You will appear more prepared and professional
Well prepared information can increase interest
You’ll reduce the time taken for this part of the process
You’ll always be game ready.
To do this well takes time and experience to understand what aspects a buyer will value most. You should also plan how you’ll gather the data and the earlier you start, the better position you’ll be in. Ideally, we’d recommend commencing from the initial business valuation stage.
But, what information do you provide? Whilst there are must haves, other areas might be subjective depending on the strengths and weaknesses of the business. An experienced advisor will help present the most relevant information in the most appealing way, working with the buyers’ requirements. Typical information provided at this initial stage of a business sale include:
Financials
Revenue
Job details
An overview of your top clients
Aged Debtor’s
Commercial details regarding key suppliers
IT and systems
Facilities
People.
Managing this information also includes how you market the business. It’s essential to disguise the identity of your business in the early stages of a sale. Achieving a positive sale outcome can be challenging enough without having key stakeholders or staff distracted or unsettled during the early stages. Managing information and its dissemination is an essential part of the process.
To ensure you don’t miss a post in this series and to get on the pre-release list for an eBook giving you all the steps and more… just click here.
Corporate advisors, like Morgan Shaw, keep the sales processes effective and efficient, adding value along the way, whilst keeping everyone involved safe and sane. Working with a professional can significantly increase the value in your business and will ultimately result in more favourable transaction terms, a more efficient process and ultimately a higher purchase price.
To understand how you could engineer your own $30 million-dollar exit, know more about the EBITDA+ SIX STEPS TO SUCCESS™ and, how to bridge the gap, connect with the Morgan Shaw Advisory team here.