Think like a buyer to build value in your business

Crowe partner Gerard O’Reilly, who spearheads our Business Value Builder programme, advises business owners on how to build lasting value in their SME business.

In a recent Business Plus article, founder of Cult Drinks business, Eunan Ryan, talked about taking part in Crowe Business Value Builder programme to expand his business.

“In advising Cult or any other business, our approach to understanding value is from the point of view of a potential buyer.”

Over the last two decades Gerry has advised many business owners who were looking to maximise their sale price as they look to exit their business. “It’s important that potential buyers are aware of you. Positioning your company in a way that invites an approach is important”

Once an approach is made by an interested party, it is important to know not just what you want out of any deal but what the suiter wants too. “The most important thing when negotiating a deal is to understand what value you bring in the eyes of the buyer – whether that is market share, management team or synergies. If you don’t understand that fully, you risk leaving money on the table.”

Even if you are not interested in selling there is still a lot to learn from some initial engagement. Gerry advises, “Even if you are not selling we believe every business should focus on creating value for a potential buyer. Because what is of value to a buyer should be of value to you.”

Eunan Ryan from Cult Drinks says the work he undertook with Crowe helped focus his mind on an exit strategy. He decided that if he didn’t change gear he’d be locking the office door when he retired and that would be it. “I realised that I had to build the business and build value in the business. I don’t have that much of a pension, and that focused my mind.”

Creating long-term value is about building a robust business capable of generating predictable and recurring income streams for many years into the future. This should be of equal value to a business owner looking to build a long-term income stream or for passing on to the next generation, as it is to a potential investor looking to buy their business.

This is where our value building process kicks in. By planning in advance, we work with business owners, to identify and grow long-term, lasting value. Equally, there are classic mistakes business owners make in their business. We call these the Value Destroyers and we aim to eliminate these early on in the process.

The strategy is working out for Ryan’s drinks business. “Over the last few years we have made a fairly substantial investment in personnel and software. We now have ten staff and are well-positioned to properly address export markets.”

The plan for the next two years is to build their export markets in the US, Asia and Africa as well as Europe. Eunan Ryan has been shortlisted for a National Enterprise Award in this year’s ceremony at the Mansion House in May.

To find out more about how we can help you drive up the value of your business and achieve your personal and business goals, contact Gerard O’Reilly, partner and Business Value Builder programme lead.
Crowe building value in Cult Drinks Company cover
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