The crisis, an opportunity to enhance your company

The health and economic shock caused by the Covid-19 has a strong impact on companies and their organization. Even if it is very difficult today for the economic actors to project a medium and long term business plan, we think that the current crisis represents an opportunity, for the leaders who wish to transmit their company, to value their working tool. Or how to turn the crisis into an opportunity to enhance the value of the company in view of a future sale.

1. Valuing coping skills

Faced with this crisis, many companies have reviewed their way of working and managing their teams. For some of them, the use of telework was a natural step. For those who did not have processes in place to manage telework, the adaptation is being done at a rapid pace. Faced with an unprecedented situation, some managers are trying to take advantage of this moment of crisis to test new forms of organization that are less dependent on physical meetings and the famous meetings.

It is therefore necessary for organizations to manage their business in a different way, to manage their teams with more flexibility, while keeping a close management with involved employees. If you were planning to transfer your company before the crisis, you may wonder how to adapt this project to the new situation.

A buyer, with a view to taking over your business and developing it, will be sensitive to the adaptability of the company and its employees, especially in an uncertain economic context. When the economic situation becomes favorable again, you will be able to value these adjustments which will have enabled you to bounce back as quickly as possible and which will have demonstrated your resilience.

Read also: 3 criteria that make a company attractive to a buyer

2. What investors/recipients are looking at

Once the crisis is over, a buyer will estimate the value of your company based on its ability to function in a troubled context. This is a reason to carry out a 360° diagnosis of the company and to identify all the obstacles (financial, legal, commercial, organizational, etc.) to a possible transfer.

Check certain strategic points: in addition to the possibility of working remotely, the buyer will evaluate the supply chain, the financial strength of the main customers, the company’s ability to control operating costs, the state of its production facilities… and even the conditions of the main contracts that commit it.

In short, you can take advantage of this complicated period to review and deepen the strategic points that a potential buyer will not fail to analyze…

3. Putting yourself in the conditions for a recovery

We believe that a dangerous strategy would be to simply wait for market conditions to improve before re-launching a transmission project, without taking into account the consequences of the current crisis.

1) Because there will certainly be a “before” and an “after” crisis A potential buyer will be even more vigilant on certain points as seen above.

2) A buyer will value your company on the way it has adapted to a new context.

3) Finally, your competitors may have taken advantage of this moment to improve their competitiveness at the time of the takeover, and for some of them even develop new products or services (windfall effect).

For all these reasons, if you are determined to pass on your business, don’t be a wait-and-see type. Make this moment an opportunity to work on your file. Actoria, specialist for more than 25 years in business transfer, accompanies the projects of transfer, opening of capital and business mergers. Contact us.