Maximising the potential of business sale post-COVID-19

Based on the history following the dot.com bubble, the GFC and other market falls, we know that it is very common to see a sharp rebound in private equity activity. In other words, professional business buyers often become very active at times like these.

A recent survey conducted by SourceScrub of venture capital and private equity firms highlights two key factors:

• At the moment they are spending 39% of their time managing and protecting existing portfolios during COVID-19. As soon as this passes (the consensus estimate was for Q3 of this year) they will spend 36% of their time sourcing new deals and 28% of their time in executing those deals.

• 76% of respondents said that deal sourcing would be their top focus post-COVID-19 and 32% said they would be more aggressive in deploying capital compared with the period before the pandemic.

To maximise your potential during this time, you need to do two things well: explain the past and sell the future.

This means you should be taking a hard look at the business (with a buyers lens): review risk, performance, benchmarking and most importantly valuation. Our Business Insights report will help with all of these factors – knowing what the business is worth and why and how you can maximise valuation and prepare for a buyer.

The alternative is to wait for the ring and hope you can exit (not recommended!).

Craig West

Managing Director | Succession Plus

Craig West is a strategic accountant who has over 20 years’ experience advising business owners. His background as a CPA in public practice, provided invaluable experience in the key issues of concern to business owners. Following 6 years of study to gain two masters degrees, Craig focused on Capital Gains Tax (CGT) for business sales advising on strategic management of tax issues. This experience formed a very strong view that business owners (and often their advisers) were unprepared and unaware of the steps required to prepare a business for exit.

Craig now acts as a strategic mentor for mid-market business owners and has written four critically acclaimed books on employee incentives, succession planning, asset protection and exit strategies. Craig has conducted numerous seminars and keynote presentations throughout Australia & internationally, including adviser education programs for the Institute of Chartered Accountants and CPA Australia.