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Pre-Sale Planning, also referred to as Value Driver Planning, focuses on building and protecting business value in specific areas of an owner's business to close a financial gap between the current value of the business and the value necessary to achieve the owner's financial objectives after leaving the business.
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Call Now! (818) 781-0082 Toll Free (888) 853-0986 Go to... Pre-Sale Planning Pre-Sale Planning Home ⁄ M&A Advisory Services ⁄ Pre-Sale Planning Pre-Sale Planning, also referred to as Value Driver Planning, focuses on building and protecting business value in specific areas of an owner's business to close a financial gap between the current value of the business and the value necessary to achieve the owner's financial objectives after leaving the business. Some of the common Value Drivers that, based on their status, will increase or decrease the business value are: Effective financial controls Strong and improving cash flow A solid and diversified customer base Operating procedures that improve the growth and sustainability of cash flow A strong, motivated management team A realistic growth strategy Buyers look for and pay for Value Drivers that increase the transferable value of the business. Value Drivers increase the transferable value if they contribute to cash flow both during the original owner's tenure and after his or her exit. One of the most important Value Drivers in any business is a strong and motivated management team. The management team sets the company objectives, monitors its activities and motivates the staff. Buyers want to know who runs the company and if they are willing to stay after the business sale. With a strong and motivated management team, it is more likely that customer relationships will be maintained, the company's reputation will remain intact, and the existing management team is able and willing to grow the company. There are several other Value Drivers that are not shown in the brief list above. Each Value Driver contributes to or protects the cash flow of the business. Buyers will pay higher multiples for cash flow which is shown to be stable, predictable, and growing. If you are thinking about selling your business within the next 3 to 5 years and think there may be a gap between the business value today and what you need to get from the sale, Pre-Sale Planning / Value Driver Planning will help you: Identify your objectives Determine whether there is a financial gap between the business value today and what you need to get from the sale Assess the Value Drivers that exist in your business as well as those that are missing Determine the optimal transfer structure based on your desire to transfer the business to your children, key employees, a competitor, a third party, etc. Implement specific recommendations to build and protect the business value thereby decreasing or eliminating the financial gap, if determined to exist Every business is unique. If you have questions or would like to discuss Value Drivers for your specific business and industry, please give us a call at 818-781-0082 or Contact Us Today! converted by Web2PDFConvert.com
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