Strategies to Build Business Value
After completing over hundreds of transactions over the past 30 years, the business brokers at California Equity Group have a deep knowledge of the key elements that all types of buyers look for in assessing the value for your company and determining its suitability as an acquisition or merger candidate.
Your financial advisors will conduct a detailed analysis of your company including its organization, human resources, products and services, markets and competition, facilities and equipment, and an analysis of its financial condition. Upon completion of the review, they will provide you with a detailed road map to strategically increase the value of your company.
Generally, there are many ways to increase the value of your company, some requiring more time than others. In the short term, you can add value to your company by focusing on the following key areas:
- Make cosmetic facility improvements
- Remove obsolete assets
- Remove excess or discretionary expenses and non-operating activities from the financial statements
- Prepare audited or reviewed financial statements
- Pay down or remove long-term debt
- Increase the company’s net income
- Remove personal guarantees from company obligations
- Settle any existing litigation
- Obtain options to extend facility leases
- Perform an environmental facility review
- Prepare or update the organization chart
- Lesson the percentage of customer concentration in your top 10 customers
Over the long term, one to five years, our financial advisors can assist you in building value in your business by focusing on the results of our analysis and addressing those critical areas which tend to impose the greatest downward pressure on the value of your company. Generally, our financial advisors will focus on the following critical areas to improve long term value:
Marketing:
The business of business starts with marketing. Our financial advisors will assist you with tuning up and executing your marketing plan including advertising, branding, positioning, sales, product development/service development, and competition.
Financial Management:
A critical area of focus for buyers. We will help develop and install the financial and accounting controls along with the reporting processes so the company’s success can be documented.
Financial Performance:
Every company has unique opportunities and capabilities for profitability that can be overlooked by management. We are able to provide finance planning, capital investment planning, cash flow analysis, and financial projections. Our financial advisors will assist you in determining and further developing the key profit centers to improve the profitability of your company.
Operational Management:
We will assist with appropriate changes to administration, resource planning, process optimization, quality improvement, infrastructure, technology updates, supply chain management, distribution, logistics, and outsourcing.
Human Resource Management:
This is one of the most important areas of focus for buyers. When buyers review a business as a merger or acquisition candidate, they pay particular attention to the strength of the company’s human capital including the management team as well as the rank and file employees. They look for committed management and employees who continue to focus on and embrace the company’s long-term success. The financial advisors at CEG will help identify and develop plans to retain the company’s most important managers and employees. Our objective is to align employees’ objectives with the company’s and to motivate your team to stay committed to the long-term success of the business. We will assist with the development of performance-based incentive programs as a retention tool for your management team and the drafting of effective “stay bonuses” and incentive plans. Finally, we will review health insurance, retirement, and other employee programs and provide recommendations to further "lock-in" key employees. The selling, merging, or divesting of a company without key employee’s involvement and commitment to stay and grow the business can substantially reduce the value of the company and prolong the time for a successful exit of the ownership.
Strategic Acquisitions:
One of the most effective ways to build your company’s value is by making strategic acquisitions of competitors or other vertically or horizontally related companies. The acquisition process enables your company to build value by acquiring competitors, by growing your market share, by adding new or complementary products and services, by expanding territories, by adding new and complimentary facilities, by acquiring seasoned industry personnel and by increasing revenues and profitability, just to name a few. Your financial advisor can assist you with developing and executing your acquisition criteria so that you can build your company’s value by making Strategic Acquisitions.
Learn more about M&A Services: Buyer Searches
Building company value can be both a short term and long term process each with its own set of parameters. After 30 years of executing complex M&A transactions, the financial advisors at CEG have a keen sense of the specific elements that buyers focus on in determining the value and suitability of a target company, and we are experts at assisting you in developing and maximizing that value.
Business Development
“ Thank you so much for doing a fabulous job handling the sale of our company. We had faith in your skills and experience after being referred to you by both our attorney and accountant but you guys exceeded all our expectations and we now know for sure there is no way imaginable we could have handled this complex transaction on our own. We are on our way to a much deserved retirement and we really appreciate how hard you guys worked and how you tirelessly protected our interests.
We felt comfortable you flushed out the entire marketplace of potential buyers after confidentially contacting hundreds of strategic and financial buyers and you ultimately negotiated a great deal for us from the perfect synergistic buyer.
The Herculean effort you guys performed closing the deal in just thirty days working 24/7 through the month of December including the holidays to close before year’s end was above and beyond the call of duty. You guys managed the army of accountants, lawyers, lenders, appraisers, environmental consultants, employee/benefit consultants, and real estate advisors all the while making sure the mountain of purchase documents matched the hard fought for deal terms.
We are very happy being part of the Trulite organization and we look forward to slowly transitioning out of the company we founded 30 years ago while knowing that our employees and customers will be left in very capable hands.”
Jon Witkin, Western States Glass