Preparing Your Business for Acquisition: Key Steps and Pitfalls

Preparing Your Business for Acquisition: Key Steps and Pitfalls

When you are planning an exit in near future or you just want to retain options that will not hurt you in case something goes wrong then selling your business is a wise decision. A company, that is ready to be sold, attracts more attention of potential buyers willing to buy and ensures a bigger price. Nonetheless, a great number of business owners underestimate the complexity of the process of buying a business and period of preparation. Given the right approach and backing, though, you can sidestep the obvious traps and end up with a more likely shot at a smooth, lucrative sale.

We understand that the main issue is that mid-market business needs help with going through all the stages of acquisition readiness and therefore, at Pacifica Consulting & Investments, Inc., we can provide this kind of service. Whether it is operations and financial structuring or leadership development and market positioning, we assist owners who want to sell out successfully and at a maximum price.

Start With a Clear Strategic Vision

You need to know your own intentions before going ahead to prepare your business to be acquired. Do you want to sell all and become detached or do you want to remain involved after the sale? Do you prefer your ideal buyer to be a strategic partner, a group partaking in the scope of the private equity, or a rival? Making your objectives clear assists in making out your preparation plan and what direction in terms of the business to take.

Pacifica Consulting & Investments, Inc. helps the owners of the business to establish the exit goals and tag the goals with the right strategy. Through the vision we are able to assist in tailoring the plans to handle all elements of the operations, financial, and strategic nature in a manner that enhances the attraction to the buyer and maintains the objectives of the owner in the long term.

Clean Up Your Financials

The clean and well-organized financial products increase the chances of gaining trust and better deal. However, a large number of companies in the mid-market have holes in their books, unconventional accounting methods, or discrepancies that sound alarms when they are subjected to due diligence. The past financials and forecasts will be one of the first items that any buyer will question.

The team of advisors at Pacifica helps the clients to streamline their financials long before a sale right on schedule. We assist in agreeing upon normalized financial statements, classifying one-time adjustments, and making sure that important financial ratios, i.e. EBITDA, margins and cash flow are calculated and reported correctly. We also introduce the clients to the long term accounting partners who can also be used to prepare reviewed or audited financials in case there is an occasion.

Strengthen Your Management Team

Depending on the owner is one of the greatest risks by the buyers. A company that cannot operate without its creator is more difficult to handover and sells cheap. Dirigiste leadership, on the other hand, gives confidence and helps raise the possibility of a successful integration after an acquisition.

Pacifica consulting and investments, inc. provides executive development consulting and team performance consulting to enable business owners establish robust internal leadership. We also help clients to recognize the main areas of leadership gaps, develop young managers, and have succession plan in place to make the business more viable and scalable.

Document Systems and Processes

The desire of the acquirers is to feel like business will go on even in the absence of the owner. This does not need just a good team to find a solution, it needs well documented systems, repeatable processes and scallable infrastructure. All the essential processes (sales process, HR procedures, operational process, customer intake etc) must be standardized.

Pacifica offers services to review the operational performance and map the processes to enable business firms to document and streamline their operations. We will find inefficiencies or mismatches and help implement clear, reproducing systems that minimize risk and ensure growth under the new ownership.

Build a Growth Narrative

Customers do not simply need to know where your firm has been but where it is headed. The perception created by a great growth story based on the real data and having a good market position can add great value to your business. It makes the issue of performance be centered on a prospective potential performance thus you are able to negotiate on a higher note.

Pacifica Consulting & Investments, Inc. also advises its clients on analyzing of market opportunities, customer trends and competitive positioning. We assist in the creation of elaborate growth strategies and talk of strategic that demonstrate how the enterprise can grow through the appropriate investment or partnership with a buyer. Such stories are irreplaceable when presenting the pitch and engaging with management teams of prospective acquirers.

Know Your Buyer and Position Accordingly

Various buyers are different in terms of priorities. A strategic buyer may also be interested in market share or proprietary technology whereas a financial performance or a privately owned company may be focused on the scalability of the company. To position your business well you have to know who is most likely to buy your business and make your messages and preparation only to meet that individual.

Pacifica incorporates elaborate buyer profiling in order to assist clients in matching and profiling the most appropriate buyers. We build personalized go-to-market plans enabling your business strengths to shine in the light of the objectives of the buyer in order to maximize interest and value.

Prepare for Due Diligence Early

One of the most critical and significant parts of the transaction in any given acquisitions is due diligence. The list of the requested documents by Buyers will include different financial records, legal documents, work contracts with staff, taxes, IP ownership, and information about customers. Failing to prepare can result into delays, renegotiations or worse still lost deals at this stage.

This is the reason why Pacifica Consulting & Investments, Inc. advises clients to start due diligence preparation much earlier prior to taking business into the market. We assist in having the important documents in place, planning possible red flags and practice the due diligence examination so that it is ready. Proactiveness will keep the timeline under control, and you will not have to be surprised at how your valuation is damaged.

Common Pitfalls to Avoid

Most entrepreneurs commit fatal errors before a takeover. Others overprice their business and lose prospective buyers. Some take too long to start preparing, thinking that they can do something about it when a buyer is interested. Others allow the emotions to influence the decision making or they engage in doing it without the assistance of the professionals which is a costly mistake.

Here at Pacifica we have witnessed these errors numerous times, and know how to avoid them. Our full-service acquisition preparation services will assist you in tracking the process and move forward with transparency, precision, and faith. It can be preparing marketing material to sell to buyers, cleaning strategically, or an overhaul of management’s books, but we will see you through every step of the process.

Work With Experts Who Know the Process

Selling is among the greatest financial occasions in your life. It is not a matter of getting a deal at all, is it to get the right deal on the right time and subject to the partner. Your prior planning can as well shape the way the outcome will be long term and in the future.

Pacifica Consulting & Investments, Inc. assists mergers and acquisition business owners to develop strategic but actionable plans that will maximize enterprise value and get high-tier acquirers. At our firm, financial expertise, operational perspective and practical M&A experience are combined to assist mid-sized companies in their transition with confidence. No matter where you are on the path of entertaining the idea of selling your business or talking seriously with potential acquirers, we have the advisory services to help you get the difference between a good deal and a great one.

To learn more about how we can support your acquisition readiness journey, visit our website at www.pacificaci.com.