Collector - November 2016 - 15


COVER

BUILD
YOUR EDGE
Ten ways to increase your company's
value long before its sell-by date.
By Anne Rosso May

Here are 10 projects you should take on
to increase the value of your company and
get the highest possible price when you
finally do sell. These valuation drivers are not
overnight fixes; for the most part, they are
ongoing projects that require years of proven
sustainability. So what are you waiting for?
It's time to get started.

PINPOINT YOUR END GOAL
"We go on for years and years, and walk
into the office every day and handle all our
day-to-day client issues, and we rarely stick
our head up and ask, 'What am I doing and
why am I here?'" said Mark Neeb, IFCCE,
president of neebEDU, LLC. Neeb speaks
from experience, having sold his previous
company, The Affiliated Group, in 2014.
He said that answering philosophical
questions like this can help identify the end
goal for your business-an essential first step
in your long-term transaction plan.

COLLECTOR 11.16

G68062ACAI.indd 15

If you are banking on your business to
fund your golden years or launch a brandnew company, you'll want to work with your
wealth management advisor, tax preparation
firm and accountant to figure out how much
money you'll need. From there you can work
backwards to determine how you'll have to
change your business model to reach that
amount.
M&A experts recommend drafting a
three- to five-year plan that spells out how
your business is going to grow year after year.
Without this plan, you'll have no clear path
to your desired result.
"When people tell us they'd like to
complete a transaction in five years, the next
thing we ask is, 'All right, what are you doing
today to make that five-year sale happen?'"
said Mark Russell, managing partner for
Corporate Advisory Solutions. "In most
cases, we learn that the owners are just
focused on running their business. It's rare

that anyone has put an actual plan in place to
achieve their desired exit valuation."

DIVERSIFY YOUR CLIENT BASE
Take a hard look at your client roster. Is
your business being fueled in large part
by just one or two customers? While those
relationships may be going well now,
potential buyers are usually wary of an
overreliance on a small number of clients.
M&A advisors note that a client
representing more than 25-30 percent of
your business will likely be viewed as a risk
by a potential buyer-unless, of course, that
client is an entity like the U.S. Department of
Education with a multi-year contract. Failing
that, any client with a standard 30-day-out
clause in its contract shouldn't be solely
relied upon as a future business driver.
"Generally, every prospective buyer wants
more future client revenue rather than less,"
Edens said.

15

10/14/16 9:39 AM



Table of Contents for the Digital Edition of Collector - November 2016

President’s Page
Industry News
Best Practices
FYI
Collection Tips
Build Your Edge
Sky-High Expectations
Off the Hook
Calendar
Honor Roll
A Clean Bill of Health
How to Engage a Disengaged Employee
A Hire Purpose
NJ Appeals Court: Shorter Time Frame Applies to Retail Credit Card Debt Collection
Compliance
ACA SearchPoint
Last Word
Collector - November 2016 - Cover1
Collector - November 2016 - Cover2
Collector - November 2016 - 1
Collector - November 2016 - President’s Page
Collector - November 2016 - 3
Collector - November 2016 - Industry News
Collector - November 2016 - 5
Collector - November 2016 - 6
Collector - November 2016 - 7
Collector - November 2016 - Best Practices
Collector - November 2016 - 9
Collector - November 2016 - FYI
Collector - November 2016 - 11
Collector - November 2016 - Collection Tips
Collector - November 2016 - 13
Collector - November 2016 - Build Your Edge
Collector - November 2016 - 15
Collector - November 2016 - 16
Collector - November 2016 - 17
Collector - November 2016 - 18
Collector - November 2016 - 19
Collector - November 2016 - Sky-High Expectations
Collector - November 2016 - 21
Collector - November 2016 - 22
Collector - November 2016 - 23
Collector - November 2016 - 24
Collector - November 2016 - 25
Collector - November 2016 - Off the Hook
Collector - November 2016 - 27
Collector - November 2016 - 28
Collector - November 2016 - 29
Collector - November 2016 - Calendar
Collector - November 2016 - Honor Roll
Collector - November 2016 - A Clean Bill of Health
Collector - November 2016 - 33
Collector - November 2016 - 34
Collector - November 2016 - 35
Collector - November 2016 - How to Engage a Disengaged Employee
Collector - November 2016 - 37
Collector - November 2016 - A Hire Purpose
Collector - November 2016 - 39
Collector - November 2016 - NJ Appeals Court: Shorter Time Frame Applies to Retail Credit Card Debt Collection
Collector - November 2016 - 41
Collector - November 2016 - Compliance
Collector - November 2016 - 43
Collector - November 2016 - ACA SearchPoint
Collector - November 2016 - 45
Collector - November 2016 - Last Word
Collector - November 2016 - 47
Collector - November 2016 - 48
Collector - November 2016 - Cover3
Collector - November 2016 - Cover4
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