A business strategy is often seen as a "required" multi-year plan to tell others (inside or outside the organization) where the organization is working toward over the next 3 to 5 years. The moment a business owner has made the decision to sell, a 3 to 5 year timeline no longer applies.
A business strategy may be waived (renewed) because it is a task for the potential buyer. However, even if the entrepreneur's horizon is shorter than that of business, a business strategy is of great value when selling. What is the added value of a good business strategy before, during and after selling my business?
Business strategy as a value driver prior to sale
A well thought-out business strategy gives direction to a company through clearly formulated objectives, taking into account critical success factors and translated into the most important areas of responsibility and primary processes of the company.
A perfect business strategy leads to the necessary focus of people and resources in the organization to collectively achieve actionable goals.
A perfect business strategy takes into account optimizing/maximizing cash flows and reducing business risks, or value creation.
A perfect business strategy is the basis for direction, design and direction for the future.
A perfect business strategy provides input from the financial business case for years to come.
The more concrete and sharply defined this strategy is, the better the future value can be projected and estimated by both the seller and the possible potential buyer. A perfect business strategy leads to an added value of the company.
Business strategy as a handhold during the sales process
A perfect business strategy also provides greater insight into what is appropriate as an ideal match for the business and its future. It maps the discussion around the added value of the direct and indirect environment of the company. The discussion leads to looking beyond as "the crown prince in the organization," "the largest competitor or customer," and "private equity" as a solution direction of an ideal buyer.
When ranking the identified candidates on the different tracks, the business strategy can again be referred back to to put the parties along the measuring stick. Do the activities fit together, do they complement each other or is it more of the same, is the party active in the same markets or not, what are the possibilities for integration over time, what is the management style of the organization and does it fit with the current culture and way of working, what does the earnings model and cost structure look like and can synergetic effects be realized from all these aspects?
With the completed discussion around the perfect business strategy, this period also reveals what continues to be steered, despite the numerous moments of distraction during the sales process. Monitoring current performance and making timely adjustments is realistic through this business strategy, without continuously demanding the entrepreneur's full attention. Indeed, during this period, this entrepreneur is also primarily concerned with guiding the healthy and bright future of his company after the sale.
A business sale is one of the most important "projects" of the entrepreneur and is usually considered so interesting and requires energy, time and attention of key people in the organization that it is a challenge to keep the organization running as intended. Achieving the (financial) results as communicated in the business case to buyer can be hampered by this and as a result the agreements made can come under pressure.
In addition, the company can show, that without the dependence of the entrepreneur, it can make timely adjustments and independently adapt to the new challenges that occur daily.
Business strategy as a basis for the (un)certain future after sale
A perfect lived business strategy ensures a common goal to be pursued and clarity in the organization. In addition, seller shows daily concern for the (long-term) future and demonstrates that the culture of value creation is not a fluke.
Regardless of the sales process, the seller, but especially the buyer, benefits daily. Upon completion of the process, an exciting period of transition begins for seller, buyer and the organization. All benefit from building on the organization with the present perfect business strategy as a solid starting point for the (un)certain future.
In short, the perfect business strategy at all stages of the sales process is the basis for a successful future of the company.
