By Bruna Vianna, Managing Partner at Acorn Advisory
Every company, sooner or later, faces the reality of a transaction: sale, merger, or family succession. But selling a company is much more than simply setting a price. For the transaction to take place on the best terms, it is essential to understand that selling a company requires planning and action.
The idea that companies are bought reflects an inevitable truth of the market: investors and buyers are continuously on the lookout for opportunities, but only companies that prepare themselves stand out and achieve a better market value. It is not just about setting a price or announcing that there is interest in the sale, but about positioning the company so that its real value is perceived and maximized.
In this article, we explore how each step on the path to sale directly impacts the outcome of the transaction. Transforming a reactive approach into a proactive and assertive attitude increases the attractiveness and value of your company in the market.
You may be creating your own trap
Many entrepreneurs fall into the trap of thinking that business success automatically translates into attractiveness for acquisition. This perception, although understandable, is one of the biggest misconceptions we find in the M&A market. The illusion that “if my company is doing well, buyers will come” disregards the complexity involved in the sale process, which requires much more than positive financial results.
The trap of passivity can be costly. The false belief that your company’s appreciation depends exclusively on its results ignores the essence of successful transactions: a deep preparation that puts your business in the spotlight.
A proactive stance is not just a differentiator, it is a requirement. In the M&A process, being prepared means anticipating buyers’ demands and expectations, offering a complete view of the company’s intrinsic value and growth potential. This value is not represented only by financial performance; it encompasses factors such as the resilience of the operation, product quality, commitment to innovation, the addressable market, and the positioning your company has in the market.
Ask yourself: does your company have scalable processes? Does it have a loyal and segmented customer base? Is the organizational culture strong enough to add value? The entrepreneur seeking a successful sale must act with vision and planning, not just reacting to opportunities, but building them.
Your business is not the only fish in the ocean
It is essential to be aware that your company is not alone. There are countless companies seeking investors and buyers, which means that competition for attention is intense. This is a crucial point that many entrepreneurs neglect: believing that only the internal merits of their business will be enough to attract offers. The reality, however, is that the market is full of opportunities, but also of alternatives.
To stand out, it is essential that your company is not only technically prepared but also well positioned. To ensure that your company is not just “one more in the market”, but a unique acquisition opportunity, the entrepreneur needs to master every aspect of the operation, the market, and financial management. From the structure of liabilities to the formalization of processes, every detail needs to be clearly presented.
Another crucial point is the alignment of value expectations. Many entrepreneurs have a subjective view of their own company’s value, often fueled by an emotional connection to the business. This perception can lead to a misaligned value indication, which can discourage potential interested parties, driving away good opportunities. A professional and objective valuation, based on market multiples, realistic financial projections, and a detailed competitive analysis, establishes the real value of your business.
One interested party is good, two is strategic, three is a bidding war!
The presence of a single interested party may seem advantageous, but it limits bargaining power and reduces the margin of choice. With two interested parties, the entrepreneur can already explore advantages, such as comparing proposals and evaluating synergies more critically. When three or more players enter the dispute, an environment of real competition is created, where each potential buyer comes to value the opportunity to acquire the business even more and tends to maximize their proposal to secure the transaction.
However, attracting multiple interested parties requires the company to have clear positioning and a well-defined value narrative, anchored in solid financial data, competitive differentiators, and realistic and attractive growth potential. This vision must be presented professionally, both in the projections and in demonstrating how the company fits into each potential buyer’s strategy. With an approach that engages more than one interested party, the entrepreneur transforms the sale process into a true dispute, where the value and conditions of the transaction tend to reach more attractive levels.
Know the real value of your company before the buyer does
Even for companies that do not yet have an immediate sale schedule, a realistic and detailed valuation allows managers to clearly understand the potential of the business, identify improvement opportunities, and align strategies that can reinforce the company’s appreciation trajectory.
When we talk about valuation, the complexity goes far beyond simply considering annual revenue or Monthly Recurring Revenue (MRR). It is essential to consider a wide range of factors, from market behavior to strategic positioning and long-term growth projections. An incomplete valuation can not only underestimate the value of the business but also compromise bargaining power in a possible transaction.
By understanding the real value of the company, managers gain a solid basis for decision-making and prepare for possible M&A discussions with clarity and confidence. This approach allows the company, even without the immediate intention of selling, to be ready to seize the best market opportunities.
No rush, but prepared: being ready is the differentiator
It is easy to fall into the trap of waiting for the “perfect moment,” but time is uncontrollable, and ignoring market signals can be a decisive factor in the success of a transaction. The increase in transactions in your sector or the approach of potential buyers can be a clear warning that your market is maturing rapidly. Optimistically waiting for the scenario to be more favorable in a few years can be a risk: by then, the market may already be consolidated, and you may find yourself as the last private company competing with well-funded public competitors.
At Acorn, we understand that a successful transaction does not happen just by putting the company on the market; it materializes when we overcome the initial organizational challenges and build a solid foundation of value. Our advisory not only assists in complete preparation but ensures the best value extraction for your business.
Do not let your company’s value be underestimated. We invite you to explore how Acorn can support your next transaction.
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