Value Enhancement

Business owners work hard to run their businesses, but many times they do not plan accordingly for the sale. Factors such as key metrics and proper reporting could dramatically impact the valuation or sales process. Often the financials and supporting documentation required in due diligence need adjustment and preparation as they may not have been needed for daily operations. Data may need to be researched to create reports or documentation to sufficiently demonstrate a company’s value. We develop a value enhancement plan so that your business can be best represented.

Some of the critical areas that impact the market value of a company:

Cash Flow and Profitability

A healthy business has adjusted net profit margins of 15%+ before 'owner add-backs'. Brentwood Growth can help calculate your company’s adjusted margins and put in place a strategy to increase those margins over time. This is very critical in the overall valuation of the business.

Revenue Growth

Increasing revenue growth year over year is vital. More than 20% revenue growth is outstanding, 10% is higher than average, 5 - 10% is average, 3-5% is acceptable, and less than 3% is concerning. We can analyze your lead generation and pipeline management strategy, develop a growth enhancement plan, and assist with the execution for increased revenues.

Client Diversification

Depending on a single customer for more than 20% of your revenue leads to higher risk in a company’s stability. Brentwood Growth will analyze your customer mix and develop a plan to expand customers and reduce client concentration.

Reoccurring Revenue

Both strategic and financial buyers put a valuation premium on reoccurring revenue because of the regular, predictable income stream it provides. Brentwood Growth will work with you to develop strategies to maximize this component of your revenue mix.

Properly Structured Balance Sheet

Having a clean balance sheet is important to a buyer: working capital, minimal receivables (less than 30 days outstanding), good relationship of accounts receivables and account payables, and a healthy mix of short and long-term debt. We will ensure your business displays a favorable balance sheet and obtains debt and/or equity capital if required.

Management Team Depth and Transferable Process

The business must be transferable and not completely dependent on the owner to operate successfully. This is true for sales, operations, client support, and strategy. There must be a scalable and repeatable process in place all the way from lead generation to receivable collection that the new owner can assume. We will ensure the management depth and procedures are in place.