The fact that a staggering 80% of company sale processes collapse before they reach legal completion (according to a recent study by Harvard, which is further supported by independent Bluebox surveys), provides evidence that advisers are getting something wrong when trying to sell businesses.

A lack of focused planning means many sales processes are doomed for failure even before they start.  The financial and emotional costs, resulting from an aborted sale process, can be significant, so everything possible should be done beforehand to maximize the chances of a successful sale.

However, as well as mitigating the risks of a collapsed sale process by addressing (well in advance) the matters that will inevitably attract the attention of some due diligence, there are a number of things that business owners can do to actually increase the price at which they will be able to ‘sell up’.

Enhancing the value of a business is not only about boosting profitability in your actual year of sale, far from it in fact!  In my teams’ experience of selling more than 110 private businesses over the past decade, we firmly believe that buyers will almost always attribute value to a wide range of other factors above and beyond profitability such as; the visibility of future earnings, the breadth and stability of your customer base, the strength of your management team, and also, critically, the size and credibility of your opportunity map.

We advise almost all our clients, who are contemplating a sale of their business within the next 36 months, to consider at length the way in which they will present their “opportunity map” to buyers i.e. what does the next 36 months look like AFTER a sale. After all, it is the future that an acquirer is buying, and that which incoming investors will be interested in.

Creating an opportunity map, however, is not just about putting down on paper a list of the great ideas that you have had for developing your business under someone else’s ownership. Key, is the way in which it can be presented to be credible.  Credibility is vital and presenting growth opportunities that are ‘unproven’ (and no more than just high-level strategic thinking) may do more harm than good.

Start thinking about how you will depict your opportunity map well ahead of a sale and do ensure the opportunities you are presenting are reliable and ‘tested’, at least to some degree, in advance of going to market.  In doing so, your opportunity map will stand the test of credibility and the price you achieve on your sale will be far greater as a result.

If you are thinking of selling your business and we’d be delighted to have a call to discuss how we can help through our different products and packages.