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We Maximize Business Value

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Strategies to Maximize Value

Expert merger and acquisition advisory services

Many business owners and entrepreneurs that are pursuing M&A opportunities often focus on revenue and growth of a business to maximize M&A valuation. Although this is an obvious strategy, it can also be one of the biggest mistakes a business can make, risking a lower valuation.

However, focusing on the M&A process itself and strategizing accordingly can actually help increase valuation. We use the following key concepts when it comes time to sell your business for maximum value.

Create Competition

Rather than settling for any buyer that is interested in purchasing your company, it is in your benefit to generate interest and demand, which ultimately increases the overall worth and valuation of your business.

In order to effectively do this, focus on reaching out to multiple buyers, and using tactful negotiation strategies to create a competitive process.

All in all, if only one buyer approaches your business, then it’s best to play off the competition by creating an intense “bidding war”. Although this sounds intimidating, it will effectively lead to an increase in valuation.

Searching for the Right Buyer

When announcing an M&A initiative, rather than waiting for an interested buyer to come along, it is more beneficial to take the M&A process into your own hands.

Do your research to find a buyer that would make the best strategic fit. In order to maximize your opportunities, research international and domestic companies that would best fit within your business’ strategy and mission, and can help promote growth that will allow your business to go in the right direction, ultimately boosting valuation.

M&A Cycle

In order to increase valuation of your M&A, it is best to pursue opportunities during an active M&A cycle. For example, we are currently in one of the most active M&A cycles in history, so now would be the ideal time to pursue any M&A opportunities.

However, due to ebbs and flows in various markets and in our economy, the M&A cycle won’t last forever. Therefore, it’s best to pursue the M&A process during an active cycle in order to ensure maximum valuation.

Consider Competitors

When analyzing an M&A cycle, current market trends, and supply and demand, it’s important to pay close attention to what your competitors are doing.

For example, if one of your competitors sells in a particular sector, then that company will likely receive the highest valuation. However, if you are the last to sell within your sector, then you run the risk of receiving the lowest valuation.

Make the Most of Your Market

In addition to considering what your competitors are up to, be mind of current market trends. For example, if your company is a messaging app company, and the market is at a peak for acquiring smaller, private companies within this sector, then this would be an ideal time to sell and to ensure maximum valuation for your company. If you choose to wait it out and don’t opt to sell during peak market times, then you risk waiting years to sell or even selling at a lower valuation.

In addition to considering what your competitors are up to, be mind of current market trends. For example, if your company is a messaging app company, and the market is at a peak for acquiring smaller, private companies within this sector, then this would be an ideal time to sell and to ensure maximum valuation for your company. If you choose to wait it out and don’t opt to sell during peak market times, then you risk waiting years to sell or even selling at a lower valuation.