Have You Hit the Maximum Value for Your Business?
Let me start with a question for any business owners — how do you know when you’ve achieved the maximum possible valuation for your business?
On the surface, it may seem a straightforward calculation based on current revenue, profits, growth rates and average industry multiples.
But determining your true “peak value” potential is far more nuanced. Unless the right drivers are firmly in place, there’s a strong chance you’re missing out on a higher valuation.
Because the financials and operating metrics potential acquirers and investors care about most extend well beyond just topline and bottomline numbers.
They’re looking for tangible evidence your business can maintain and accelerate performance after you exit.
The truth is, you need to concentrate on those value drivers that matter most to your acquirer — not those adding nothing.
Let’s say your business ends up acquired predominantly for its people and skillsets. Yet you’ve invested heavily into IP over the years, compared to skills training.
You might consider that the wrong focus, in hindsight. Far better you visualise that scenario playing out way before actually exiting. Not when negotiating terms.
That’s why I always urge business owners — if an exit is even remotely on your radar in the next few years, you need to take action now to maximise value. Not next quarter. Or after.
There will always be a reason to kick the can down the road.
I’ve seen it many times — owners confident from strong financials, believing they’ve maxed valuation…only to leave 2–10X of the true potential untapped.
All because they failed to appreciate the outsized impact a particular value driver can have on what acquirers will ultimately pay.
It’s one of the most expensive blind spots I regularly encounter.
Feel free to reach out if you’d like to explore your business’s true value potential…
#NextLevelGrowth #M&A #ExitLaunchpad #SMEs #ExitStrategy
