Recently, one of our Partners – John Davies, met with a business owner who wished to sell his business but was held back from achieving the value he wanted as 70% of his business came from just one customer.
John showed him how we could break that dependency by acquiring another business, in fact one of his competitors, reducing that % of turnover to just over 30%, increasing profitability through bringing the two business together, exploiting any cross sell opportunities, utilising best processes throughout and removing duplicate costs to significantly change the dynamics and valuation of the exit. Unfortunately, COVID 19 came along / the client was British Airways.
Ideally, turnover from any one customer should not be more than 20%, (10% in a perfect world!).
Buyers don’t like risk and so the lower the risk, the greater the value.
If you are serious about achieving maximum value for your business (for the time you want to sell), talk to us and we’ll explore the opportunities to bolt on another business or businesses prior to your eventual sale.
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