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.
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.
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.
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.
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.
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.