Do you want to sell your company? Preparing your company for a future company sale?
Or are you going to raise venture capital for the next step in your business growth? Whatever your plans are, execution starts with good preparation.
Based on our own years of experience, we have compiled a Top 16 of factors that have a major influence on company value.
Click the image below to view the full infographic.
Do you score high on all 16 points?
Great, then a Dream Exit is within reach. Are there several parts that you do not have in order? No worries. With a good plan of action, a nice exit is also achievable for you.
1. Recurring revenue is high
Subscriptions, service and maintenance contracts or other licensing models are forms of recurring revenue. Companies with a high recurring turnover are much more interesting than companies that have to reset the turnover counter to €0 every month.
2. The complexity is low
Do you only have to do little to quickly bring in many new customers? Top! Are you dealing with long implementation times, complex on-boarding processes or other delaying factors? Then find out how you can reduce the complexity.
3. The market potential is high
Companies with a high market potential are often market leaders in 1 or 2 sectors and can still grow in other sectors. Are you the market leader in a sector and is there no prospect of growth in other segments? Then think about a way to break through this.
4. EBITDA is higher than 20%
Companies with healthy margins are always in demand. A EBITDA of more than 20% is an excellent indicator. Can't get this? Then try to cut costs or improve margins in other ways.
5. The business model is sticky
A sticky business model binds customers to your product or service. Switching or canceling is not an option! The product or service often belongs to the primary process and is a must-have. If you sell a nice-to-have, there is work to be done.
6. The Intellectual Property is in our own hands
Do you own the Intellectual Property? Or do you buy the most important value of your company through third parties? The latter has a direct negative impact on the value of your company. Ownership is crucial. You are then not dependent on others.
7. The international potential is high
Companies with a high international potential are interesting for every investor or buyer. It's all about scalability. If you have already taken international steps yourself, then you have an attractive company. Even if you can only demonstrate potential, you are often in the right place.
8. The recurring costs are low
Low personnel costs, limited subscriptions, insurance and rental costs or real hosting costs: you can take a critical look at these and other recurring costs. Save where possible.
9. Human dependency is low
In any successful business, there are a few people who pull the trigger. Yet it is important that success does not depend on these people. It may hurt when they leave, but every individual, including you, must be replaceable.
10. There is a proven track record
Success has value if you can demonstrate that it lasts for a long time. High NPS scores, reviews or appealing customer references are part of your track record. But steady growth figures also reinforce your track record. Trust is the keyword.
11. The innovative power is high
How innovative and future-proof is your company? Are advanced solutions used? Do you have an innovative attitude towards your products and services? The more innovative, the better at selling your company.
12. The business model is hard to copy
Do you own any patents? Does copying your product or service cost a lot of time and money? Then you have a big advantage over your competitors. If your business model is easy to copy, think about smart ways to stay ahead of the competition.
13. The company is Operationally Excellent
Every human action costs time and money. For example, to what extent are your processes for marketing, sales and delivery automated? The use of CRM and ERP software is only the basis for this. Successful companies have automated as much as possible.
14. The churn rate (customer churn) is low
It is not only the growth figures that are important for company sales. High customer churn negatively impacts your business value. Pay attention to ways to attract customers to your business and keep your churn rate as low as possible.
15. The NPS score is high
How satisfied are your customers and to what extent are they a promoter of your products and services? Positive and loyal customers affect business value. A commonly used method to measure this is the Net Promoter Score (NPS).
16. The customer portfolio is broad
Having a broad customer portfolio has everything to do with the continuity of your company. If your organization is heavily dependent on a few large customers, then it is time for action. A broad customer portfolio prevents your company from being vulnerable.
With this Top 16 you can critically examine your organization. are you going business sale process along with your own team? Or do you engage an expert and independent party to guide you to your Dream Exit?
If we know one thing for sure, it's this: you need someone you can trust. Someone who will tell you the truth even if it is not pleasant to hear. Someone who keeps everyone on their toes.
You started this company from your passion. You have put your heart and soul into it. You deserve no less than the top prize. So let you go to company sales only advise by a consultant who gives you the best possible exit.
