maximizing the value of your company

1 CEO REPORT: MAXIMIZING THE VALUE OF YOUR COMPANY

BENCHMARK INTERNATIONAL - CEO REPORT

Maximizing the Valueof Your Company


ABOUT THIS REPORT

This report was created by Benchmark International and is the second of a three part series.

To see other reports in this CEO series, please visit:

ABOUT BENCHMARK INTERNATIONAL

Benchmark International’s global offices provide business owners in the middle market and lower middle market with creative, value-maximizing solutions

for growing and exiting their businesses. In 2015, Benchmark International transacted on over $1B in deal value across 50 industries worldwide. With

decades of global M&A experience, Benchmark International’s deal teams have assisted hundreds of owners to achieve their personal objectives and

ensure the continued growth of their businesses.

THEBENCHMARKVAULT.COM/CEO

BENCHMARKCORPORATE.COM

http://www.thebenchmarkvault.com/ceo/

http://www.benchmarkcorporate.com


MAXIMIZING THE VALUE OF YOUR COMPANY

Many owners are unaware of why they should maximize the value of their business before selling or the steps to take in order to do so. The best place

to start is creating a plan and understanding where your company can grow. If you have been contemplating geographic expansion or targeting new

customers, now is the time to act. Maximizing the value of your business before finding buyers may significantly improve your chances of completing a sale.

Many buyers seek businesses that strive to improve operations and financial results. Sellers may think the best option is to gain market feedback before

pursuing business development, but this may actually be more detrimental because it can give an unrealistic indication of the value of the company. It is

recommended that you estimate the value of your business at every inflection point in the market. This will also show you that the value of your business will

fluctuate with the economy, just like a house. Another useful tip is to wait until you engage with an M&A consultant before deciding on an exit or growth

strategy to guide you along the process.

Benchmark International follows the five simple steps to prepare your company for its maximum value.

1Understanding Objectives

2Internal Factors

5Exit Options

4B lue Sky

3ExternalFactors


UNDERSTANDING OBJECTIVES

To begin understanding your options, you should first consider your personal objectives. Is there a value you want to achieve? Are you seeking a particular

buyer, financial or strategic? Do you want to create a succession plan for your management team? Answering these questions will be a great start to

defining your objective. It is equally important to understand the objectives of other shareholders and how they may differ from your personal goals. Other

considerations include timing, the business’ position in the market, and corporate objectives. Have you considered a timeline of when you would like to

fully exit your company upon a sale? You may have decided to leave the first day following the sale, but it is not uncommon for business owners to change

their minds, in either direction, regarding when they will leave the business. You should also consider the status of your business as it sits today. Analyzing

your company’s value today may help you identify opportunities to improve your company’s position in market.

WHAT ARE YOUR PERSONAL OBJECTIVES?

What is it you want to achieve? A value? A particular type of buyer? A future for your management team?

WHERE IS THE BUSINESS TODAY?

Where should it be positioned in order to command the best value?

DO SHAREHOLDERS HAVE DIFFERENT OBJECTIVES?

Differing sets of objectives can all be satisfied thoroughly.

WHAT ARE THE CORPORATE OBJECTIVES?

The best interests of your business might be of equal importance to your personal aspirations.

WHAT DOES THE TIMING LOOK LIKE?

Over what time frame do you wish to exit? A full exit on day 1 or a phased exit that influences your value?

WHAT ARE THE VALUE DRIVERS?

Are there distinquishing factors at play in your business, responsible for your degree of success?

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INTERNAL FACTORS

Two key internal factors include the people you are currently employing and the company’s financial position. Your employees should be a consideration

when discussing the option of selling your business. Especially if you depend on them to maintain company operations. The biggest question is whether they

would stay following a new sale under new owners. If staff members are not willing to stay, then there are gaps to be filled, which can seem unattractive

to potential buyers, especially if those positions are within the management team. Potential buyers are typically more attracted to businesses with a strong,

upper-level management team with the relevant industry experience needed to operate the business. Another key internal factor is the company’s financial

performance. Financial statements are heavily reviewed during the due diligence process of the sale. Your business may gain value if it has a surplus in

assets and its capital expenditure supports growth. Other internal factors that may impact the value of your business are the profit, management accounts,

incomes/losses, profitability, and adjustments.

PEOPLE SYSTEMSCORPORATE

GOVERNANCE

HOUSE KEEPINGFINANCIALS

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EXTERNAL FACTORS

External factors can be equally as important as internal factors when valuing your company. The market outlook and trends should be given careful

consideration and your business model should demonstrate an awareness of any impending changes. Proprietary services or products unique to your

business are key selling points that can counteract negative market trends. Competitor analysis should also be considered when valuing your business. The

analysis may reveal commonalities between your competitors, allowing you to adopt good practices and differentiate your own business accordingly. It

may also bring to light any barriers to entry that are crucial to new entrants in your industry.

MARKET OUTLOOKAND TRENDS

COMPETITORANALYSIS

BARRIERSTO ENTRY

MARKETSHARE

UNIQUESELLING POINTS

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THE BLUE SKY

The blue sky step analyzes your company from the marketing plan to customers, products and advertising. A well thought-out sales and marketing plan may

demonstrate a stable model for continued growth, ultimately making your business more attractive to buyers and increasing your value. The marketing plan

should address securing new customers and creating new products to keep up with the competition in your industry. Advertising efforts extend into your

company’s website, promotional and sales literature and video testimonials. Combined, the three advertising efforts may boost new business opportunities

and brand awareness.

PROFITABILITYOF CLIENTS

NEWMARKETS

SALES &MARKETING PLAN

EXPANDINGSECTORS

WEBSITE &TESTIMONIALS

PROMOTIONAL &SALES LITERATURE

RESOURCESREQUIRED

IMAGE &REPUTATION

NEWCUSTOMERS

NEWPRODUCTS

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EXIT OPTIONS

When thinking about leaving your company, the toughest decision will be your exit strategy. You should be researching potential buyers through buyer

intelligence and reviewing M&A activities with your M&A consultant. The more buyers you engage with, the higher your company’s value may be. M&A

activities may give you a good indication of the value your company can achieve in the market.

RESEARCHPOTENTIAL

BUYERS

ANALYZEM&A ACTIVITY

GO-TO-MARKET

TARGETSTRATEGIC

BUYERS

ENGAGEM&A GROUP

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There are numerous steps that go into valuing your company and engaging

with an M&A consultant may greatly influence the result of your valuation.

We Are ReadyWhen You Are.

CALL BENCHMARK INTERNATIONAL TODAY: 813-898-2350

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