If you are currently running a successful IT business and beginning to start thinking about your strategy for exit, but are baffled by the task of developing, then presenting your IT business for sale and achieving a fair price, then I understand how this process can be all-consuming and bewildering, but help is at hand.
Having been on the developing for sale and exit journey myself, I know very well that this is a full time job, involving a carefully considered strategy and the implementation of everything that goes with it; for most people waking up today thinking “I think I’ll sell my business”,,,,, they need to think in terms of a 3 to 5 year project.
I can feel the sense of bewilderment already, but before you sign off, just bear with me and I’ll explain. Firstly, like most things in business, this process has become a lot more involved in the last 5 years and has become a specialist role in itself. And we shouldn’t be surprised at this; just think of the likely customers for your business; they are not charitable organisations, they are successful people who have the buying of a successful investment in mind; no thought at all about helping you retire to a beach in the South of France.
The days of easily leveraging forward projections on, or ratios of, goodwill are well and truly over, and as much as investors will still pay money for quantifiable potential, it is important to remember that perception is reality! So if you are going to present your business for sale and achieve the maximum value for all your efforts, I would advise you to appreciate the following.
- The Need to Sell On The Upward Curve.
- The Need to Show Growth.
- The Need for a Quality Sales Pipeline.
- And Never Forget That Perception Is Reality.
It would be my advice that you do nothing until you can satisfy all the above, at least. You want buyers to see a continuous upward growth and to be left wondering; OK, with this growth, wow, I can add value and really take this somewhere. Always leave then pondering how far the business can grow, not where the bottom is? Which is more than likely to be in their thoughts if you present flat-lining accounts, dwindling sales pipelines and no defined strategy for growth.
And finally, one last consideration for now; remember, no buyer wants to buy at the top, they must perceive that there is something in it for them, or why bother?
So, if we can’t present this investment picture to potential buyers, just how do we achieve this? Well, in the current challenging trading conditions, this has become more difficult and all businesses with growth at the forefront of their objectives, must appreciate that it can never be achieved by just waiting for the phone to ring more often.
Most market places in the UK are over supplied and as a consequence, there is a natural “Culling Process” taking place and if we are to avoid this and grow, someone has got to build the strategy and campaign for growth from the ground floor up.
As a minimum this will include finding the answers to the following questions; Where are our target growth markets?
- Where do we have spare capacity and existing services that can be "Leveraged" and “Scaled Up?”
- How do we target the decision makers within our target markets?
- How do we create our message, including a valuable USP?
- How do we ensure our message is seen by the decision makers?
- What are the correct platforms of engagement for these decision makers?
- How do we generate and maximise opportunities to do business in these target markets?
- What’s the “Cost-Benefit” analysis?
- How do we deliver on this?
Now, if you do not already have people with the answers to these questions in your organisation, just how are you going to achieve this? Well, in the absence of a “Plan B” you are going to have to acquire them, which invariably involves “Buying a Winner!” And this not cheap; in today’s market and trading conditions, these people are very scarce and highly sought after.
They know this of course so this process will be many things, but it will not be cheap! Excluding the tertiary costs of employing these people, they are unlikely to be obtained on a basic salary that will be the side of £100K per annum that you would like, and will they will invariably want a share of the profits, if, that is, you can find one of these illusive people?
Fortunately there is another option available to the owners of businesses looking for sustainable and profitable growth, in order to either maximise the sale of their business at exit, or just to grow in this market, because you are not currently looking to sell.
You can engage Virtuoso Consultancy as your out-sourced Sales, Operations and Business Development partners. If you want to grow your business and via building sustainable, effective and highly profitable sales pipelines, then Virtuoso Consultancy can deliver this for you.
Working on a flexible basis around the needs of your business and supplying the skills and expertise required in order to succeed on your behalf, we have already constructed and delivered successful growth models for IT businesses operating in the Independent Schools, Pharmaceuticals, Legal and Recruitment sectors, to name just a few.
My fellow directors and I have over 40 years combined experience in growing businesses and can deliver sales, operational, business development and marketing experience that is IT sector specific, straight to your door.
We know how to build these models, they are “Current” and continually evolving, we know how to target and speak to the decision makers in your target markets and most importantly, we know how to grow your business and make you money!
If this post has resonated and you would like to explore how we can help you achieve your growth aspirations, then please do not hesitate to contact Andrew Banning on 0118 947 1010, or at andrewb@virtuosoconsultancy.co.uk
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