31 Mar Growth Initiatives That Add Value to Your Business
If you’re seeking to improve your online business, executing short and long-term growth initiatives can be an incredibly effective strategy for generating increased revenue while adding value. These initiatives will not only benefit the company at present but will also help you prepare for a future M&A transaction.
It’s never too early to begin developing an exit strategy. In fact, we always recommend building a business with a future sale in mind. This mindset empowers you to prioritize high-value initiatives that ultimately help secure the maximum value for the asset you’ve built.
Identifying High-Value Growth Initiatives
We’ve written extensively about the structure of high-value M&A transactions, as well as how to understand the opportunities your business represents. Both factor into your approach when choosing which strategies to pursue first.
Begin by establishing a timeline for your exit, including your goals and objectives as well as any milestones leading up to a potential sale. For example, these milestones may include a benchmark for retirement or a predetermined revenue marker.
Next, start preparing for a potential sale 12–24 months in advance of your anticipated exit date. Focus on initiatives that will strengthen the company’s operational foundation and create opportunities to leverage that foundation to continually scale the brand.
Here are five of the most common growth initiatives that add value in the long term:
Often, entrepreneurs underutilize social media as a growth initiative. However, when used properly it is an efficient means of improving brand awareness while driving traffic to your e-commerce website and other online storefronts. Consider investing in content creation and developing a robust social media strategy.
For example, budget for expanded Pay-Per-Click (PPC) campaigns targeting relevant longtail keywords. Create a group in which customers can discuss recent purchases and relate their experiences. Of course, even something as simple as sharing blog content on a consistent basis can pay dividends.
Prospective acquirers mitigate risk is by searching for companies with diverse, defensible product offerings. Move forward with new products slated for launch and continue introducing new variations of existing products, even after your deal goes to market.
Remember, maintaining momentum is critical. Leverage your product design methodology to plan ahead and continually build out your road map. Any remaining items will be ready for an acquirer to quickly introduce into the company’s catalogue, essentially picking up right where you leave off.
Sales Channel Diversification
At present, Amazon-based businesses are in high demand. However, brands with diversified sales channels that are not solely dependent on a third-party platform are still highly desirable.
Maintaining an optimized e-commerce website is an excellent way to differentiate your business from others on the market.. Focused development of sales channels on other e-commerce platforms can help grow off-Amazon sales.
Moreover, this initiative can help you appeal to a broader consumer base. It also produces greater diversification, reducing risk if sales should unexpectedly drop off on any one platform.
Refined Logistics Infrastructure
Well-established supplier relations represent a tremendous value, particularly if you have negotiated exclusivity agreements that can transfer with the sale. Maintaining longstanding partnerships while streamlining other aspects of sourcing and procurement can save money in the short term while differentiating your business and increasing your valuation.
Target efficiency in manufacturing, shipping, receiving, storage, and fulfillment. Establishing well-optimized systems with excess capacity to scale makes it that much easier for an acquirer to assume operations and drive rapid, short-term growth.
Easily Replicable SOPs
If you haven’t already, begin documenting SOPs in an accessible format. Imagine you are constructing a blueprint for running the company and include everything a prospective acquirer will need to know to make the business successful.
Replicable SOPs give prospective acquirers peace of mind, as they do not have to completely reinvent the wheel. In-depth guides for each and every business function empower the company’s new owner to sustain the business’s upward trajectory without sacrificing the momentum you’ve built.
Future Growth Strategies
Finally, even growth initiatives that are not in process or staged for execution can impact the outcome of an M&A transaction. Prospective acquirers look for stable, proven assets with a degree of untapped potential. Consequently, opportunities to drive rapid short-term returns on investment are highly desirable.
Businesses with easily executable initiatives described in detail are especially attractive. Thus, highlighting these initiatives is critical to the success of an M&A transaction.
To learn more about how an intermediary can assist you in framing the opportunity to market your deal, read our recent blog post: 8-Figure M&A Transactions: How Investment Bankers Market Deals | Global Wired Advisors
About Global Wired Advisors
Global Wired Advisors is here to help you sell your Digitally Native D2C or FBA business. We are Mergers and Acquisitions specialists with over 50 years of combined experience in selling online companies. Try our Free Value Estimation Tool and see what your business is worth.
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