SME Pricce to Succeed

Price to Succeed

‘The water was cold and shook me up. It was another few seconds before I realized that I accidentally drilled into a water pipe behind the plasterboard during one of my weekend DIY (don’t!) projects at home. With one hand covering the leak I frantically called a local plumber – who thankfully happened to be in the neighbourhood.

He was helpfully skilful and smoothly billed me £200 to seal the hole – a job that took him less than a minute.’

So why was I glad parting with my money and not fuming (I was, at myself, but not him)? What I needed was a skilled, well-equipped professional to be available immediately. The plumber was able to provide me with flawless service that roundly fit my requirements.

Despite all this, pricing for goods and services is rarely simple. One reason being service providers rarely take is a value-based approach to pricing. Not bandying hackneyed buzzwords but what you can charge as an individual or organisation often reflects the value or perception of value your customer places on the offering. Improving this perception is then a matter of digging deep to understand what the problem or need of your customer is and then figuring out a way to best solve that requirement.

So how should SMEs (or any other) businesses think about pricing? Here is a starter kit:

Making Your SME Business Investment Ready

Do you hope to sell your business in the future? Is your SME business investment ready?

If you are planning to exit or sell your business in the future you need to ensure your business is growing and operating in the right way focussing on 4 key elements to ensure your SME Business is Investment Ready.

Listen to our Derbyshire and Staffordshire based CMC Partner, Richard Lloyd on the 4 key principles of running a business, helping you to grow and build value in your business to ensure you are ‘Investment Ready’ when the time comes to exit or sell your business.

Webinar Presentation & Recording: Mergers & Acquisitions for SME’s – Is it a viable growth option?

Have you ever thought about buying a business?

Thank you for attending the Thames Valley Chamber of Commerce webinar on 17th October where our CMC Partner, Atreya Chaganty discussed whether a Merger or Acquisition would be a suitable option to help your business growth.

During the webinar Atreya explored how SME’s can successfully acquire companies and generate positive returns for their stakeholders, whether M&A is the best option and what the alternatives are.

Key Takeaways:

  • Exploring the link between growth and acquisitions
  • How should you weigh the risks versus rewards of acquisitions?
  • What should you do in preparation for an acquisition?
  • How should an acquisition be executed?

View the M&A Presentations Here

Listen to the Recording Here

Book your Free Appointment:

Atreya is offering a free confidential meeting to all attendees to explore the potential of M&A in your business, just complete the contact form below.

Why should every business owner have an exit strategy?

To maximise the full business value, business owners need to plan their exit strategy at least 2 years in advance of selling or retiring from their business. Watch this short video to find out what’s involved in getting your business exit ready for a potential sale or succession.

 

How can an exit strategy benefit your future?

Like many business owners, you have devoted immeasurable amount of work and resources on developing your business. When you are busy with every day operations, it’s difficult to find the time to think about your exit strategy or retirement plan. Developing an achievable exit strategy is an essential task and too few owners give it proper consideration. An exit strategy can benefit your future. It can help you realise your businesses full potential whilst maximizing its sale value.

74% of entrepreneurs in the UK risk long-term business success by not giving proper thought to their exit strategies’ Deloitte Entrepreneurship: UK 2008

With all that you have invested, doesn’t it make sense to plan an exit from your business to protect your future?

What is an exit strategy?

An exit strategy is a plan on how you intent to leave the business. We know this is not as easy as it sounds. Your business has been a significant part of your life and dreams. Contemplating a future apart from it can be difficult to visualise. As hard as it may be, you need to start thinking about your own goals, targets and timescales to ensure your exit is within your control.

What should an exit plan include?

Your exit plan can be a simple one page document but should include:

  • Your preferred exit option
  • Deal Structure
  • Timing
  • Preferred buyers
  • Business valuation considerations
  • Actions

The key is to understand that an exit is a process that may occur over many years and there’s more exit options than simply selling your business. For example you may choose to set up a management team in order to take a back seat while receiving a regular income. To understand more about the various exit options, we recommend you read this blog 

An exit strategy ensures your vision of the desired outcome is achieved and helps to minimise the risk of failure or disappointment.

Carefully planning your exit from your business has huge benefits:

  • exit your business at a time of your choosing, when the business is doing well and the market conditions are advantageous
  • mould your business into the ideal shape for your chosen exit option – maximising the value you get from it
  • prepare successors if they’re coming from within the business, this could be a family member or part of your management team
  • prepare the 2nd tier management team, if you wish not to sell but draw a regular income from the business
  • make your business more appealing to potential buyers, if you wish to sell

If you don’t have an exit plan in place, we would recommend you think about creating one now, even if you expect to work for another 10 -15 years. Preparing a exit strategy is good practice and can help shape your business to achieve your future plans for life beyond your business. To help improve your chances of a successful exit we have complied a short 10 point checklist. Download here 

How can CMC Partners help sell your business?

CMC Partners can help sell your business successfully. Selling your business is a big lifetime decision and its not something you should take on your own. Watch this video to hear how CMC Partners can guide you from developing your exit plan with you, building the value of your business to increase its worth to selling your business.

 

Scaling your business

Are Technology Service SME’s in a Growth Trap?

The UK attracted more venture capital investments than any other European country in 2018 (Source: TechNation 2018). Scaleups in the London area delivered 56% annual growth rates, the fastest in the world.

Yet, a study by CMC Partners, of 117 businesses within a 50-mile radius of London, each with annual revenues less than £10m and delivering traditional IT services, found that revenue CAGR in the last 3 years was a mere 2.3% with EBITDA growth in the same period generating a CAGR of -9%. Equally profoundly EBITDA (as a percentage of revenue) was 4% in the same period.

These are surprising results. the FTSE Techmark 100 grew at a CAGR of 7.3%, while the retail price index grew 2.9%, in the same 3-year period, as a broad comparisons. These traditional IT service businesses are clearly far away from the scorching scaleup growth rates of new tech businesses in the same area.

So what explains this data? There are many plausible strategic and operational reasons.

M&A Survey

We want to hear from you!

Have you ever actively explored acquiring another company as a means of adding new skills? Have you felt constrained by the seeming complexity of buying another business? Have you ever wondered how acquisitions could contribute to your company growth in the long term?

In our constant pursuit of bringing ever more relevant services and adding value to our clients and potential clients we have launched a survey on the role of Mergers and Acquisitions in your company’s growth.

To address these and much more we would very much appreciate just a few minutes of your time to complete the survey.

Take our quick survey and you will receive a FREE strategic conversation to explore the potential of M&A in your company.

Create your own user feedback survey