Run your company as if it is for sale, so it never has to be
Mergers and acquisitions among non-banking money lenders have increased for several years, with about a growth of around 20% compared to 2018 (remember, the rates are for the first time in years in the 5s in the 5 IMBs) to 2022 ( This is recently enough where everyone painfully reminds the market for the market, right?), And another 30% will rise to present from 2022.* Keep in mind that we are not talking about hundreds of transactions per year, but with another one Year of economic uncertainty looming, it is an idea about the heads of more and more IMB owners.
Occasionally an owner comes to me and asks what his company is worth. They know that when it comes to value, they understand that the story is more than the figures on the balance. My first question is: “Do you run your company as an active or liability?”
Owners who operate their business as if it is an active, have made the difficult decisions strategically in recent years:
● Legal format activities and business staff
● Address and adjust the compensation to current market conditions
● Leverage -automation
● Eliminate duplicative technology.
● negotiating supplier contracts
● Eliminate Executive Bloat
● Invest in marketing and recruitment
Owners who exploit their business as if it were an obligation may have made some of the same decisions, but from the perspective of “How do I keep driving for another month?” Instead of “how do I get out of this in 5 years?” Their results will be different.
Play scary shows. Owners of these companies often consist of under -performing sales teams that are separate on their seats. They have little reason to believe that things will improve at your organization or that you switch them to the best company on the outside. Post-Close, their performance continues, appears as a rocket and your distribution on the backend-plums.
Even worse, the owners who have fully checked out. Those who do not know what is happening, and when their CFO suggests to sell, throw their hands up and ask: “For how much can I sell?”
If your company is not valuable, you will eventually walk away with nothing, hoping to find a soft landing for your people and even break your obligations. Falling volume, eroded margins, inflated technology costs and layered management that is not linked to income are costs that cannot pay the owner. These are the sellers who go to the market and have no buyers. What happens if you can’t even break on your obligations and your credit tanks? Now you will start again for a great time.
This is the time to make decisions that create an environment of success and high performance. It is never too late to shift the process of your company and to position yourself for long -term success. Bring a coach, consultant or transformational leader to rebuild the trust of your team and to develop a winning strategy for the future. Use competition benchmarking to know how to stack in margin, volume, product mix and costs to arise. Use this data to make adjustments and improve your position.
Run your company as if it is for sale, so it never has to be.
*https: //www.nationalmortgagenews.com/list/ma-activity-in-2022-and-2023-Alist? Utm_source = C hatgpt.com
Julia Brown is an M&A an expert in integrations.
This column does not necessarily reflect the opinion of the editorial department of Housingwire and the owners.
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