Economic Downturn Gives Owners Time to Work on Value Drivers

Paul G. DiNardo CPA

They are essential for the successful sale of a company and are the responsibility of the owners to create and nurture, not the employees, and include:

· A stable and motivated management team.

· Operating systems that improve sustainability of cash flows.

· A solid, diversified customer base.

· A realistic growth strategy.

· Effective financial controls.

· Stable and improving cash flow.

In a strong merger & acquisition (M&A) market, buyers compare the relative strength of your company’s value drivers to those of your competitors. In today’s M&A market, however, buyers want companies that possess all of the characteristics of a well-run business. Additionally, tighter credit forces buyers to use more of their own capital to buy businesses so they look for acquisitions that carry minimal business risk. Companies with strong value drivers in place carry less risk. Companies lacking one or more value driver(s) simply will not attract interested buyers. This harsh reality means most owners have a lot of work ahead.

  Economic Downturn Gives Owners Time to Work on Value Drivers