Building Company Value - What is Your Future?

Business buyers want to know what the future holds for your company. If crystal balls worked, they would be sitting with the gypsies staring into them. Instead they look at your business's past to do their best to determine your business's future.  

The Future

The most important thing to the purchaser is "what does the future look like?" To create the most value and obtain the highest price the answer needs to DEMONSTRATE a clear growth path with manageable risk.

Every company has a different route to create this bright future. Just as your eventual buyer is going to be looking for clues to the future in your data you should too.    

What is your persuasive story of continued growth of both the top and bottom line? Quick service, deep inventory, extensive engineering knowledge are a few options. How can you grow your revenues and your margins between now and the day you close the deal? How can you create sustainability? Not just a upward blip when the economy is good but a sustainable advantage.  

Develop a plan that answers those questions and then act on it. Make it real. Don't get lost in small valuation details. Go after the big gains with a vengeance. Execute and keep executing.   

Finally, as part of the process you must demonstrate that your plan works with at least two years positive results.  Unproven potential may be why they buy but it is rarely reflected in the price.  Proven potential can increase your multiple and price. 

Fear of Loss

When you sell proven past growth and credible future growth it is easier to attract investors and buyers. In order to get the highest price you need multiple motivated buyers. Even if you have ten years of 35% growth and profits if you only have one buyer your value and price will get chewed away.    

The key to getting the best price is finding highly motivated buyers who see themselves as owners in their mind's eye and then create the fear of loss. That is when buyers stretch to get what they want.  

In a recent transaction we were involved with the first buyer group thought they had a lock on the transaction and were negotiating hard and low. When the second offer came in the first buyer increased his offer 35% the next day. That is the power of multiple motivated buyers.

This is what Harvest does well. We find qualified motivated buyers and generate multiple offers. Fear of loss produced by multiple buyers competing for a compelling growth story will absolutely get you the highest price every time.

                           -by Greg and Ed  

Thanks from the Harvest Team!

Ed Davis (301) 325-7687  Email    

 Ed Curry (443) 340-0257  Email