Proactive Growth Plan For Your Business
A potential buyer who is considering the purchase of a business will want to know how the business will continue grow long after the existing owner is gone. The growth potential of a business plays a major role in its sellable value. While buyers will purchase a business at a price based on current and historical financial, their main motivation will the opportunities to grow the business beyond its current size.
To look at this from an outside perspective, in order to get top dollar on the sale of a business the existing owner needs to show a tactical growth plan that will provide a clear growth path. These include all the opportunities that can be tackled and exploited by a buyer to increase sales and profit. It is important that existing growth opportunities be realistic and clearly communicated in writing. This growth plan document could serve as a template for discussion during initial buyer meetings. It would cohesively paint the larger picture of your business and translate into added value.
Creating a Business Growth Plan
When an owner can describe realistic opportunities for growth that specifically illustrate the reasons why cash flow and profitability will grow after the business is acquired, a buyer’s perspective on return on investment may appreciate and translate into higher value. A documented growth plan demonstrates the viability of the company’s future and may identify opportunities that a buyer had not considered. The obvious objective in outlining your growth strategy is to show how sales can be increased.
Some areas to consider in developing a growth plan:
- Are there additional markets that a new owner can pursue?
- What additional products could be sold to existing customers?
- Are there products or services that can be developed to generate recurring revenue?
- Where are the best profit margins realized and can they be expanded?
- Will enhancing marketing campaigns and sales increase growth?
- Can new customer segments be reached?
- Are there opportunities to grow through acquisition?
- Will developing online strategies create profitable growth?
- Can growth be achieved by expanding online or geographically?
- Would additional hires impact growth? Or, would streamlining the workforce be more beneficial?
- Is franchising feasible?
- Are there areas to explore that could decrease operating costs that you have not implemented?
- Would the company benefit through additional workforce training and education?
- Are there industry changes ahead that can be capitalized on to give your company a competitive advantage?
Developing a comprehensive growth plan that explains the options a potential buyer will have, will make your business that much more attractive as the prospective purchaser considers their options. It should be noted that 82% of business owner trying to sell their business don't do this...and that is probably why it takes 3-5 years to sell their business once it gets listed for sale.
Create a Business That Can Thrive Without You
You have worked hard to build your business and make it what it is today. It is essential to seek professional advice and support to maximize your return when you sell your business.
Author - Joe Griffith
I've been consulting with clients since the 90's in various capacities. It's only been in the last 8 years that business owners have paid me to solve their sales and marketing problems. Now I understand what Steve Jobs meant in this quote: That only after you're there, can you then connect the dots. “You can't connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever."