Whether you've been mulling over offers or just starting to explore your business exit strategy, maximizing the value of your company is paramount. This whitepaper is designed to guide you through the intricate process of crafting a value creation strategy. Discover how small investments in time and capital can lead to significant increases in your company's attractiveness to buyers.
We’ve created ten “chapters” of tactical content to help your business become the most valuable version of itself.
If you’re thinking about your business exit strategy, you’ve probably given thought to valuation. Perhaps you’ve even gotten offers or received a valuation appraisal already and thought “how can I make my company even more attractive to buyers?”
The truth is, there’s usually various ways to better position your company during the exit process, and even optimize and enhance the value of the business to receive maximum value. Many founders end up settling on an offer that could be much higher with a relatively small investment of both time and capital.
Investment in a pre-exit value creation strategy can pay off…
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At its core, a value creation strategy is a systematic approach a company employs to amplify the overall value of the business. As a comprehensive, yet targeted strategic plan, it includes identifying and implementing ways to improve the business, such as by increasing revenue, reducing costs, optimizing operations, and/or making strategic investments.
In the private equity world, where you will hear this term tossed around frequently, it is the strategy that is forged post-investment aimed at increasing the value of the portfolio company.
But don't be mistaken; founders can, and should, leverage tried-and-true methodologies to craft these strategies, too. By zeroing in on initiatives that increase business value, founders can enjoy similar benefits, paving the way for a lucrative exit in the future.
A value creation strategy can sound a lot like the typical overarching strategy that any company develops to drive the organization forward. However, there are distinct differences in both timeframe and scope.
The most important part of any value creation strategy is knowing where you are and where you’re going. The plan itself, while not immaterial, matters much less than having a strong hypothesis backed by data on where the company can go.
Achieving value creation starts with creating a goal (desired future state) and includes three phases:
1. Assess (see “Using a Value Assessment to Maximize Exit Value”)
2. Strategize (what we will be covering in this chapter)
3. Execute (see “Value Creation Strategy Execution”
Access the full paper here and don’t hesitate to reach out (grow@orchid.black) with any questions!
