Learning from these cases, we found that high performing and particularly successful teams had been particularly skilled at rising to some of the challenges below.
Developing and communicating a coherent growth story – throughout the sale and beyond
Throughout the sales process, scrutiny around track record and historical performance is high. Stakeholders, buyers and vendors alike, are forced to ‘cover all the bases’ and focus much of their attention around the details of the transaction. Many buyers place great emphasis on the robustness of a business, strong cash flows and an organisation’s ability to service its debts. However, businesses achieving the most favourable valuations have a strong and clearly articulated growth story outlining a detailed plan on how they are set up to deliver ‘the numbers’ as well as leveraging opportunities for further growth. These could include a well-structured regional expansion strategy, strong strategic business development capabilities, a deep product pipeline or a coherent acquisition strategy. The clearer a business is on how it can deliver these plans, and the greater the organisational alignment around these objectives, the better the case for instilling confidence in potential investors that the business will deliver its targets and present itself as an attractive asset for the next round of refinancing.
These could include a well-structured regional expansion strategy, strong strategic business development capabilities, a deep product pipeline or a coherent acquisition strategy.
Prioritising resources – balancing the operational day to day with the requirements of the deal
Most management teams describe the deal process as all-absorbing, with a great amount of management time and attention being required to prepare investment memorandums, manage the requirements of the due diligence process and negotiate with potential buyers. Smaller, leaner organisations struggle in particular as their management teams often play a key role, not only in setting the direction of the business, but facilitating much of the execution of the operational day to day as well. Reverting attention away from everyday operations can cause lasting damage to the
business and result in extended lead times in ‘getting up and running’ once a deal closes. However, some teams understand how to leverage this challenge as an opportunity. As one CEO put it:
“I always thought I was needed to make all the key decisions – in the first month of the sales process nothing happened in the
business
because I was distracted. I had to make a conscious effort to delegate better, devolve decision making and two of my direct reports really stepped up. They leapt on the
opportunity and I worked with individuals in our network to ensure they got the support and they needed.”
guidance
Rigorous delegation, a firm focus on the development of the next level down and a clear outline of roles and responsibilities during the deal process can support an effective balancing of deal and day to day requirements.
Preparing people for the challenges ahead
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