There is no one-size-fits-all way to sell a business. Each situation requires a specific approach and each acquisition advisor will have his or her own preference in terms of the roadmap and way of working.
After years of experience within the world of acquisitions in SMEs, we at Qufinity have introduced a new data-driven approach for our acquisition projects. Analyzing and visualizing (financial) company data is central to this approach before, during and after the acquisition process. In this article we will explain the different steps in which data plays a major role.
1. Preparation (using the QuScan).
After identifying the personal and business needs of our SME clients in initial discussions, we will perform a "QuScan" of the business from Qufinity using our Power BI dashboarding tools.
For the QuScan, we create a real-time link with the accounting package and, based on financial business data from the past 3 years, insight is provided into how the business has performed, where the value drivers are and what improvement potential the business has.
In an interactive session, we will walk through the most important and striking financial developments together with the entrepreneur using Power BI in preparation for the sales process. In this way, we can detect and remedy any elements that are depressing the value in time, so that we do not encounter any surprises during the actual sales process.
Ultimately, based on the analyses, we arrive at a sales strategy that the entrepreneur feels comfortable with and that fits the situation.
2. Information memorandum (based on Power BI dashboards).
Since we have already analyzed and visualized most of the company data during the preparation phase using our Power BI dashboarding tools, we are able to prepare an information memorandum (sales document) faster and more accurately. Revenue analysis, customer distribution, margins by product (category), working capital balances and more can be extracted directly from general ledger accounts through the link to the accounting package.
As a result, we can reduce to a minimum the switching with the entrepreneur or the in-house accountant for required information documents. Moreover, we can give buyers - in addition to the conventional information memorandum in PDF - a login to a dynamic Power BI dashboard, in which they can view (our selected) financial data of the company themselves and click through in detail.
Through this revolutionary way of assessing propositions, buyers are better able to make informed bids and we avoid discussions further down the road. This approach is highly appreciated by both buyers and the entrepreneur himself.
3. Book review (simplified by Databooks).
This phase is usually a headache for many a business owner. During a due diligence, a buyer will want to pull out all the stops and be able to explain every euro. This usually results in an entrepreneur working overtime with an in-house accountant or financial controller/CFO to get all the requested information on the table.
Once again, we at Qufinity can relieve involved parties of the burden of information by linking with the accounting package. During each bookkeeping exercise we prepare a "Databook" in Excel where the financial info is aggregated and structured as completely as possible. Besides saving entrepreneurs a lot of time (allowing him or her to continue to focus on the business), buyers and due diligence parties find this way of working extremely pleasant.
Data can be delivered faster and more completely, which typically allows us to shorten due diligence periods by a week and settle discussions faster.
4. Post-closing (continued monitoring in Power BI).
Ultimately, getting the financial house in order gives the buyers a boost in realizing value after the sales process. Post-closing KPIs can be steered immediately using the financial Power BI dashboards developed by us.
Its added value is also reflected in bids made by potential buyers during the sales process: a business that can be better managed from day one after acquisition is simply more valuable in the eyes of buyers.
In conclusion
In this article, we discussed the role of data and dashboarding during sales processes. The mentioned data-driven way of working during a business sale creates added value for all parties involved (entrepreneurs, buyers, acquisition advisors and due diligence parties). Also for purchase processes (buy-and-build-support) we at Qufinity use our data analytics to provide even more value to our SME clients.
