Growth Potential as an Asset
GPaaA is one of the most important factors when selling a business, it represents the untapped potential in a company that new owners and equity investors are looking for beyond the numbers in a financial appraisal.
So, what is the difference between Growth Potential and GPaaA ?
Put succinctly, growth potential only becomes an asset when it is identified and justified. The party ( the buyer or seller) with the most comprehensive and credible understanding of that asset is the one in the strongest negotiating position when valuing a company.
Logically, the vendor should know more about their business than the buyer, however human nature is such that being too close to a situation can often blind them to the "big picture" - in other words it's a case of not seeing the wood for the trees !
Very few buyers are looking for a maxed out business, so leaving room for growth is essential, but Growth Potential only become negotiating assets if you are aware of them and can quantify them, then they become key selling points. There may be perfectly valid reasons why you have not implemented those options to date, reasons which can help you target the buyer profiles that are in a position to exploit the untapped opportunities. GPaaA allows vendors to value your business not only on what it has achieved, but additionally, what I can achieve for the new owners going forward.
The Technology Investor's Advisory Service can help business owners see their technology company from a buyers perspective and ensure that every asset is leveraged to secure the best offer from the most appropriate buyers.