Business Exit Strategy Consulting to Surge Your Company Valuation

The three financial measures of company growth rate, revenue amount, and EBITDA or profit amount are by far the most influential levers in determining the value of your company.

While company owners and shareholders always seek out methods to grow these measures, they often fail to identify the business development methods that maximize a company valuation.

That's where business exit strategy consulting experts can help.

They identify an exit strategy to generate the maximum value when selling the company.

But what exactly do they do? Or what should they do to drive the maximum valuation in the least time?

To answer these questions, we gathered insights and best practices from several Johnny Grow business exit strategy consulting experts.

They provided clear evidence that the biggest results are created from a short list of programs.

They identified the business development programs that deliver the biggest financial impact. But they then advised how to orchestrate these programs to maximize company growth (and market cap), top line revenue and bottom-line profit.

So, before you consider selling your company, consider the below advice from a group of seasoned experts.

Business Exit Planning

Business Exit Strategy Consulting Experts Share a 3 Step Process


Accelerate Revenue Growth

Increasing revenue is generally a two-step process of growing the sales pipeline and increasing sales conversions. There are dozens of business development programs for each step.

Some work better than others. Some seldom work. Each differs in time to value, top line impact and bottom-line contribution.

If the company's goal is a boost to top line revenue, top methods to flood the pipeline will include the following.

  • Revenue Engineering
    This predictive analytic calculates the number of new leads needed to achieve your revenue target. It brings measurability, visibility, and predictability to the financial goal. It's also used to allocate your budget and pursue the methods that will deliver forecasted results. And it's extremely effective. Research show companies that apply Revenue Engineering acquire 2.5 times more leads than companies that don't.
  • Campaign Portfolio Optimization
    Most companies run campaigns one at a time. Running multiple campaigns at the same time will grow the pipeline. But to avoid diminishing returns you also need to apply optimization. This will ensure you are acquiring the right leads at the right cost per lead. Optimization measures sales lead costs and conversions and adjusts campaigns in near real-time.
  • Lead management automation
    Sales lead management processes get more sales leads through the revenue funnel in less time. Because they occur early in the sales funnel even small improvements deliver significant increases in the volume of qualified leads sent to the salesforce. And that delivers a big revenue uplift.

The programs above are illustrative, not exhaustive. But with programs like these you can acquire far more qualified leads predictably and at scale.

Getting more leads into the sales funnel is one thing. Getting more of them to exit the funnel as closed sales is another.

High performing techniques to increase sales conversions include the following:

  • Adopt a sale methodology. Research shows an optimized sale methodology improves sales win rates by 11 percent.
  • Design a predictable sales process. Most companies have a multi-step sale process. Most of them do not deliver predictable results because they are not data-driven.
  • Use CRM for sales automation. The integration of your selling process with your CRM software will further increase win rates by an additional 6 percent.
  • Create sale opportunity win plans. A strategy for each sale opportunity will generate more wins.
  • Implement guided selling. Use CRM workflow or AI tools to suggest next best plays, actions or other recommendations that will improve speed and results.
  • Leverage a playbook. A sales playbook will improve salesforce productivity and performance results.
  • Sales coaching. This type of one-on-one guidance delivers significant improvements to sales conversions, salesforce quota attainment and company revenue growth.

Again, the above list is not exhaustive, but does include the methods that the business exit strategy consulting experts frequently apply to accelerate results.

The two steps of flooding the pipeline and increasing sales conversions will achieve the initial goal to deliver the biggest revenue impact in the shortest time.


Accelerate EBITDA Growth

Small margin improvements deliver a linear impact to company valuation when the valuation is based on EBITDA.

Below are several business development programs that drive the biggest profit and EBITDA results.

  • Increase Customer Share
    Selling to existing customers offers the fastest sales conversions, highest close rates, and lowest cost of sales. Promotion programs such as up-sell, cross-sell and bundles to existing customers will boost margins.
  • Look-Alike Campaigns
    These marketing programs are particularly effective in improving margins quickly. They identify behaviors or characteristics of customers that resemble your most profitable customer segment but are not yet in that segment. You can then engage them with specific types of promotions to increase share and elevate them into your most profitable segment.
  • Strategic Pricing
    Price optimization research shows the combination of a formal pricing strategy and active price optimization program directly drives 2 to 8 percent annual revenue growth. Even better, this type of program incurs almost no cost of sale, so the revenue increase flows straight to the bottom line.
  • Increase the Sales Win Rate
    Pursuing strategic accounts or adopting ABM programs are just two examples of techniques to increase the sales win rate. These methods incur little or no increase in the cost of sale as the existing salesforce is closing more deals. That makes them highly effective in increasing margin and profit.
  • Strategic Account Management (SAM)
    A strategic account management program increases customer share, customer lifetime value and financial margins.
  • Plug Lead Leakage
    Every company has lead leakage and revenue erosion. Most companies don't recognize it or at least don't recognize the magnitude of the problem. Plugging these leaks creates an instant revenue and margin uplift.

Sometimes you can achieve significant profit or EBITDA improvements with efforts that reduce selling expenses or cost of sales. For example, because the salesforce is often the single biggest SG&A expense, business process optimization and other labor productivity improvements will achieve material cost reductions and margin improvements.


Accelerate Company Valuation

There are number of other factors that drive company valuation. And while many are mostly non-financial, they will clearly increase the value of your company. The experts recommend self-assessing, and if necessary, adopting programs to improve upon the following.

  • Corporate Culture
    Your culture can be a company differentiator and growth accelerator. It can heavily influence staff productivity, employee tenure and customer engagement. Buyers of companies know that the better the culture, the faster the post-acquisition integration.
  • Customer Affinity
    This is most valuable in highly competitive industries where customers perceive multiple substitutable alternatives; and where repeat business is essential to achieve revenue objectives. It also gives company buyers confidence that customers won't defect upon a change in ownership. Expect buyers to assess things like customer satisfaction (CSAT) and customer retention.
  • Company Brand
    Your brand creates a corporate identity that distinguishes your company from competitors. It's powerful and buyers will pay a premium for it. Recognize that a company brand is worth more to buyers than a product brand.
  • Consistency of Earnings
    This includes things like sales forecast accuracy, or the ability to consistently achieve sales forecasts. This itself is improved with the systemic and predictable business development programs in the prior sections.

There's no shortage of failed post-acquisition integrations. To mitigate that risk, buyers will perform deep analysis on each of the above items. Adopting programs to shore up any deficiencies will improve your position.

One More Point

These business development programs are not one-off schemes that produce temporary results. In fact, each of them get better with each successive iteration. That gives an owner two assurances.

First, the impact will continue to deliver after the sale of the company. That will help the post-acquisition integration. It will also help the owner if there is an earnout period.

Second, it provides a good place to be if a transaction does not occur or the owner decides not to sell.

And one more thing. Most readers know Johnny Grow is in the business of helping clients setup programs that accelerate revenue and profit. What we can also advise from our experience is that these programs require lead time. So, before you consider entertaining bidders, consider these measures to maximize your success.