One thing I’ve noticed with owners thinking about selling their business in the next year or so…
There is often some kind of turnaround needed beforehand to maximise the end-valuation.
So why do so many of these turnarounds fail to deliver?
> Lack of clarity. Business owners either fail to identify the real issues or they don’t create a plan that’s good enough to address them.
> Insufficient cash flow. Turnarounds often need breathing space or additional investment to make the necessary changes. Business owners don’t always get the right help.
> Ineffective leadership. Some owners struggle with being decisive or displaying empathy. Effective communication of the need for change and to help guide the team through the process is critical.
> Poor operational focus. A successful turnaround is not just about cost-cutting. Operational efficiency and streamlining processes is one of the most over-looked improvement areas.
> Resistance to change. Building a culture that embraces change is one thing. When the source of the resistance is the business owner – there’s a problem. But without proper accountability, it’s all too easy to slip into old habits and the owner can fail to deliver on the turnaround plan and get the exit they want.
I specialise in mergers and acquisitions for small and medium sized businesses.
If you’re considering selling your business in the next 1-2 years and want to learn more about how to navigate a successful turnaround prior to a sale, feel free to send me a DM…