Last time on the Growth To Exit® Blog, we talked about the 3rd Key Area in your business, the Financials and how you can best prepare your own financial forecast and due diligence before a sale.
Interested buyers will specifically evaluate and scrutinize 5 Key Areas of your business. Flaws and problems in any of these areas can lower the value of your company and result in a reduced offer from the buyer, who will need to spend extra money and time to fix these issues. To be sustainable, you must implement best practices, processes and systems in these five critical areas.
As a reminder, the five keys areas include:
This week we will take a deeper look at the IT and IP Systems inside your company and talk about how you can upgrade your operating methods and processes before the sale of your business and the change of ownership.
The best way to determine whether your systems are up to date is to hire an outside IT expert. They will tell you which systems need to be upgraded, which ones should no longer be used, and how to build data storage to recover your customer information and make all your data easily accessible.
Maybe you are already working with a vendor that you trust, and maybe they manage your email, all your data, your internal network, or maybe they have developed a piece of software that you use on a daily basis. Don’t get too comfortable with your current systems and assume that just because you have got them in place, they are your only option.
Contacting a third-party to come in and help you evaluate your IT operations is the best way to test whether or not the system that you have is the best system for your company and your growth potential. It will also help you create an IT Plan, that demonstrates the systems in place to protect your company and your customers.
An external IT advisor will help you with the following objectives:
You may be wondering why you should change what is already working.
Because buyers think differently. What works for you will not necessarily work for the buyer. It is in fact, very unlikely that a seller’s IT systems are adopted in total by a buyer. Buyers have their own way of doing things and it will differ from yours.
Therefore, the more you spend on upgrading your systems and processes, the more valuable your business becomes, since the buyer will have one less thing to worry about in the future.
The Bottom Line
When you're looking at your IT infrastructure, there is one thing that you should keep in mind; Change is coming.
Remember, if you do not go through this evaluation process, the buyer will do it for you, and if the buyer discovers any outdated software or systems, a discount will be taken from the purchase price.
The Growth To Exit® Course and Worksheets guide you through the steps needed to evaluate your company’s IT systems. When you are prepared for the buyer’s questions and give the buyer an IT plan, (describing how your company protects customer data, what your recovery plan is, and the current status of your software), that buyer will know that your company is valuable.
Next time at the Growth To Exit® Blog we will talk about the fifth and final Key Area, the Marketing and Sales processes.
Your company is the product. Growth to Exit® is the process. The Buyer is your customer.
THIS INFORMATION IS FOR GENERAL INFORMATION ONLY. IT SHOULD NOT BE CONSIDERED LEGAL ADVICE AND DOES NOT NECESSARILY REFLECT THE OPINIONS OF TSG PUBLISHING. YOU SHOULD NOT ACT ON INFORMATION RECEIVED FROM GROWTH TO EXIT® WITHOUT FIRST SEEKING ADVICE FROM YOUR LEGAL COUNSEL.