“What should be the business to interest the potential buyer and how is the price formed during sale?”, – WRITE: epravda.com.ua
Ukraine’s accession to the EU will create both new opportunities and risks for business, and some – additional loads. Depending on the level of business competitiveness, individual companies will have a prospect of development, others will not withstand competition and will have to close, and some will be able to attract an investor or sell their business to new owners. Therefore, it is necessary to think and build your own business development strategies today, including a business exit strategy. And you should not be afraid to sell business, because it is the same profit as operating, only a few years ahead. Often, money is accumulated, and to find an attractive project with an effective owner and a team is another quest. Of the dozens of studied and considered the projects are interesting. I am convinced that often the problem of business is not in the absence of investments, but in quality and profitable investment projects with a clear profitability. Create such a project and get a turn from potential investors. Therefore, he decided to share his own thoughts and experience. Advertising: for a financial investor it is important to have an effective strategy for business development and quality corporate culture, which is based on the principles of sustainable development. It should be prepared for diagnosis through psychological audit for compatibility and conflict risks. Read also: Five stories about Ukrainian businesses that are surprised by the owners and business executives are often afraid to admit themselves and others in the absence of knowledge and competencies in pre -investment preparation of business, are unable to properly assess the investment attractiveness of business , to work for the result, that is, the advertising. As a rule, the Fund, as a financial investor, is included in the authorized capital, as a minority shareholder, very rarely as a majority, to get out through plus/minus 5 years with maximum yield. Throughout the participation in the project, the Fund creates the maximum efficiency and capitalization of business through its own expertise and capacity. But it starts with a qualitatively prepared project, an effective owner and a competent team with a glitter in the eyes, the history of success and the perfect reputation of an existing profitable business. The financial investor is interested in increasing the profitability and capitalization of business through its development and scaling. At the projected level, it is very important to create a financial model that would answer the question of its viability, safety and risks, payback and profitability. The main valuation indicators of the investment project are: net present value (NPV) internal rate of return (IRR) Average profitability of investment (ROI) payback period (PP) Financial stability ratio and others. Before making a decision to attract an investor and make a pre -investment training, all other possible sources of attracting business finances must be used, and this is, first and foremost, grants, which are now significantly increased, then debt financing through loans and other commodity opportunities. It is worth realizing that an investor is a long time and with it it is necessary to share both a part in business and profit. In addition, partnerships are serious obligations and restrictions that not everyone is ready to withstand and tolerate. Investor involvement as a partner is not only about the distribution of fears, risks or responsibility, but above all, it is about the possibility of growing a multiple business capitalization and implementing their own business strategy. A qualitatively prepared business plan for the investment project, which is usually or accordingly the standard of the EBRD, sometimes Yunido, is fundamentally necessary, and also the conclusion of the auditors from the four will add weight to it. However, it is worthwhile to be aware that in compliance with all these important factors – money is investing in people, because it is people who are the key to the success of the investment project. A strategic investor is, to a greater extent, though not always, about an investment strategy for getting out of business. In order to successfully implement a business exit strategy, you need to make pre -sales training and bring it to the appropriate criteria for attractiveness. Important is: 1. Structured corporate culture and the right business format: the presence of a business development strategy, including marketing mission, vision, values, business principles. Formalized business model and description of business processes. Management structure, staffing and job descriptions. Regulations on services and departments. Business product, trademarks, its competitive advantages and customer orientation system. Personnel potential and management capacity to work independently without the owner’s intervention. 2. Availability of budgeting system, management reporting. 3. Availability of annual audit reports, financial indicators and sales reports, profits and EBITDA. 4. Description of business strategy, its innovation and energy efficiency. 5. Description of the property complex and characteristics of communications (gas, electricity, water, sewage, logistics), plan scheme. 6. Characteristics of business digitalization 8. List and characteristics of fixed assets and other property 9. Organizational and legal form of business, authorized fund and participants and their share. And at the same time, the actual indicators of business attractiveness (EBITDA) to justify the offered business price is extremely important. It is known that most transactions do not occur because of different expectations for the price of the seller and the buyer. Although you should not forget about other estimates of business activities, such as assets and their turnover, business margin and profitability of equity, inventory turnover and others. But it all starts with a competitive product and the volume of its sale. You need to regularly ask yourself: what is the content of creating and existence of your business, which has unique advantages, or a good business model that is able to generate profit and ensure the competitiveness of your product.