At a recent The Growth Consultancy Network webinar, Bruce Ramsay, Managing Partner of Consulting M&A presented a webinar during which he looked at the forces that drive the value of consulting firms.
- Financial trajectory, profitability and quality of revenue
You need to be financially strong. What is your financial trajectory? How fast are you growing and what is the profitability in that growth? What is the quality of the revenue in terms of recurring revenue, length of book revenue, length of pipeline etc?
- ‘Hotness’ of the sector and priority on buyer target lists
The second force is the ‘hotness of the sector and where you sit on buyer lists and their desire to acquire you. There are some sectors at the moment such as big data migration, cloud AI which are great areas to be in. On the other hand, simple change management is not on buyers lists right now and that has a big impact on valuation.
- Quality of the business and ability to deliver
The third factor is the entire quality of your business and your ability to deliver it. During a transaction process, Consulting M&A will benchmark your organisation on a set of key business criteria such as sales and marketing, leadership, strategy, talent and operations and will identify the areas that you should focus on to have the most positive impact on your business valuation.
- Transaction process quality
Running a transaction process in which you are proactively approaching the right buyers and in the right way to help them understand the value you bring to them will greatly impact your value.
If you focus on these four elements when you are looking to sell your business, you will greatly improve your chances of a successful, quality, high value sale.
To explore how you can drive value in your business, contact Bruce on +44 (0) 7860 442 715 or email firstname.lastname@example.org
Now that you know how to drive value in your business, why not read our blog to find out who is likely to buy your firm?