Summary: In today’s podcast Paul Szyarto from PS Group Holdings and Stephen Halanisk from Financing Solutions discuss what a buyer or investor would look at in your business. Typically, investors or buyers would want to invest in a fiscally and operationally responsible business. However, successful businesses are built on incredible execution based on processes.
Summary
Building a Business to Attract Buyers and Investors
As a business owner, knowing what a buyer or an investor would look at when considering buying your business is absolutely essential in helping you close a good deal. Every business owner should strive to build a business that somebody would want to buy when offered for sale. Building a business that attracts potential investors involves building a process, people, and technology that seamlessly aligns with your business’s overall goal. Businesses are built based on roles with competent and loyal people to support the organization to generate impact.
Next is the process and technology on which the business operates. There should be a foundation of the process that ensures that technology is leveraged rather than inflated. Employees, procedures, and technology should be pieced together to implement the plan of execution within your business. After all, people, processes, and technology are typically what every investor or buyer would evaluate before closing a deal.
Investors assess business viability on a variety of metrics. For instance, buyers or investors would typically look at efficiency, effectiveness, and the business’s productivity level. Put simply, an investor would perform a deep analysis of how an organization may succeed by looking at the success probability of the organization.
Furthermore, business buyers or investors assess how roles are defined and filled. Plus, they consider the process of execution within the organization. In other words, they evaluate the impact of what you do and how it’s being done to generate revenue margin. In addition, the role of technology in your business is also a critical point of consideration. That’s to say, is technology inflated or leveraged? Is it supporting people and processes? or is there a disconnect between tech, workers, and procedure?
Why You Should Plan to Execute
Many business owners make the mistake of not planning to execute. Building an enviable business involves setting out a clear-cut line of action that informs all the organizational decisions. Every business decision must be carefully thought through before being implemented for effective management functions. In other words, the management of people and resources within the company should derive from organizational vision and mission rather than the impulsive decision of the owner.
Building a business for investors or buyers should not be solely based on passion. A systematic approach that factors in people, processes, and tech is essential. Entrepreneurs should ensure that they have a clear road map and architecture ready to follow while executing business decisions.
Business Management
Every business should have a team of professional managers who coordinate and organize their business activities and help employees reach their top productivity levels. In addition, good management ensures that businesses attain their operational and financial objectives sustainably.
Since the management of an organization demands professional skill and expertise, it becomes imperative that entrepreneurs allow professional managers to help in the progression of their business. Professional managers or a team of mentors would help you accelerate what you do well and fill the gap of what you don’t do well. Business owners should be willing to step aside for professionals to pilot the affairs of their organization while focusing on innovation and inventions for the smooth operation of the business.
Building a Customer Base
Having a deep customer base is critical for the growth and development of every business. A deep client base is highly important for businesses to make sales and boost revenue. Good customer management entails having a thorough understanding of customer needs, behavior, and value, with the ability to engage them for optimal marketing results.
The Bottomline
Every entrepreneur should strive to build ideas and assets which can be transferred to customers and inflate purchasers’ or customers’ valuation afterward. No rational investors would want to make blind investments. Traditionally, business purchasers or investors perform thorough due diligence to ascertain whether the project they intend to invest in is capable of generating a return. Hence, investors or buyers would focus attention on the following variable while evaluating a business:
Organizational management
Customer management
Project management system
Training and program
Financial outlook
Growth and stability metric
Capital investment
Risk control
Marketing plan
Learn About Our Guest
Paul Szyarto is an Oxford University and Wharton Business School educated expert in business operations and technology and has spent the last twenty years maximizing the bottom line of more than 1000 global companies including Microsoft, Goodyear, BP, GE, United Technologies, Kellogg, Alcoa, Autoliv, Darden, Yum, and many more from the Fortune 500 list by redefining how they operate in regards to people, processes, and technologies. He is an expert in the domains of Project/Program Management, Digital Transformation, ERP Architecture, and Corporate Finance Optimization. In addition, he has personally supported the development of more than 20 entrepreneurial assets with cumulative revenues exceeding 250 million dollars. Paul is highly sought after for his speaking abilities with more than 200 events under his belt, and for his insight regarding business and digital transformation by hundreds of agencies including Fox, NBC, The NY Times, Reuters, The Inquirer, Digital Journal, Data IQ, and many more with impressions reaching millions.
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