Predictable, profitable growth. That’s the goal of most businesses. Yet, that mission becomes even more important when a company is readying itself for sale.
And as the acquisition market heats up, many companies are eyeing the funds that private equity firms have been sitting on for a few years.
So how do you make your company more attractive to a P.E. firm?
Beyond having a business that resides on the right side of an industry trend, an organization that demonstrates a distinct business development prowess will differentiate itself from the rest of the pack.
These firms are often looking for an organization that has already figured out how to differentiate itself in the market and then predictably and profitably add customers. If the same organization can also provide analytics such as cost per lead, cost per deal, conversion rates, etc. to quantify the proof of concept, all the better.
The demonstration of this level of business development sophistication significantly reduces the perceived risk of the investment.
In other words, you have to show that your company is valuable today and will continue to be in the future. From a business development standpoint, that means your margins need to be good, your cost per sale relatively low and your pipeline full. The highly-focused marketing strategy helps you attain these goals and accelerate your growth – which always catches the attention of investors.
Choosing the right company to invest in is more of an art than science. However, there are specific indicators that P.E. firms look for when estimating the value of a company. So setting your company up for predictable, profitable growth will maximize its worth.