Every business owner reaches a point where they start thinking about the future – whether that’s expanding, acquiring another company, or planning an eventual exit. However, one of the biggest mistakes we see is owners waiting too long to prepare.
Many only start strategising when they’re ready to make a move. By then, opportunities could have been missed, and the business may not be in the best shape to attract buyers or investors.
Key questions to ask yourself today:
Could your business continue running without you? If it’s too reliant on your leadership, it may not be as attractive to buyers or investors. A strong second tier management team adds value.
Have you done your due diligence? Are your financials clear, structured, and investor/buyer-ready? Muddled or inconsistent records can slow deals down and reduce trust.
Do you know what your business is actually worth? Understanding valuation now gives you time to improve it before a sale or investment. Appreciation of the key value drivers should help inform your business strategy, regardless of whether you want to sell in the near future or not.
Where to focus first:
Profitability and stability
Create sustainable margins by differentiating your product/service from the competition. Recurring revenue, costs, and minimal financial surprises make your business more appealing.
Operational strength
Buyers and investors look for efficiency, documented processes, and a culture of continuous improvement.
Growth potential
Even if you’re selling, buyers want to see room for future expansion. Know your market inside out and keep abreast of opportunities.
A common misconception: Preparing for exit doesn’t mean you have to sell. Many businesses that focus on being ‘sale-ready’ actually become stronger and more valuable to keep.
General outlook:
There is a mood of cautious optimism around the UK M&A market at present, as many commentators expect deal activity to increase over the next year. Factors such as pent-up PE demand, stable inflation and interest rates together with many SME owners planning the next steps is likely to drive deal activity.
Monthly focus:
Cyber security – the recent well publicised attacks on Marks & Spencer and Co-op have underlined the imperative for businesses to ensure they are protected from such threats. When is the last time you reviewed your security measures? IT due diligence is expected to attract greater focus going forward, as buyers seek to ensure their investment is adequately protected from these incidents.
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