Right the Ship, Regardless of the Market
In recent years, the private market has experienced a rollercoaster of volatility. From record-high valuations and deal counts in 2020-2021 to soaring interest rates and a subsequent decline in both deal count and value during 2022-2023, business owners have faced unprecedented challenges. While market conditions are largely out of a business owner’s control, there are essential operational strategies you can implement today that will maximize your potential before, during, and after a transaction.
The Entrepreneurial Journey and the Need for Structure
Businesses often begin with a spark of entrepreneurial spirit—an idea transforms into a passion, which then becomes a product or service that resonates with customers. In these early stages, founders and business leaders pour their resources and energy into the monumental task of growing the venture. This focus is typically centered around critical success metrics like revenue, product development, growth, people, and profits. However, other crucial aspects—such as accounting, tax structure, information security, succession planning, audits, and available tax credits and incentives—can often be overlooked.
As companies mature, the necessity for structure becomes evident, even if an exit isn’t immediately on the horizon. From our extensive experience serving clients on both the buy and sell side of transactions, we’ve developed a checklist to help you determine if you’re truly prepared for a transaction.
Transaction Readiness Checklist
- Data Room Ready: Ensure that all corporate formation, equity, and other critical legal documents are properly executed and easily accessible.
- Compliance: Avoid the pitfalls of noncompliance with state and federal business regulations, including tax, reporting, and ongoing entity maintenance.
- Reputable Brand: Maintain awareness of your brand’s reputation and recognition within your industry.
- Financial Clarity: Keep your financial data accurate, complete, and updated on a monthly basis.
- Metrics Driven: Develop a clear understanding of the value metrics specific to your industry.
Key Value Drivers in Transactions
The concept of “value” during the deal-making process is relative—each buyer may reward value drivers differently. However, certain factors have consistently proven to impact transactions most significantly:
- Revenue Consistency, Diversity, and Growth
- EBITDA and EBITDA Margin %
- Net Working Capital
- Cash Flow Management
Focusing on these areas not only saves time and money down the road but can also uncover potential issues early in the transaction process, giving you the chance to address them before they jeopardize a deal.
Strategic Partners in Your Business Journey
At Tanner, we serve as strategic partners to innovators, entrepreneurs, and best-in-class companies along the Silicon Slopes and across the nation. Whether you’re a startup navigating rapid growth or an established company at the pinnacle of success, we understand that the complexity of challenges increases as your business grows.
While our foundation lies in the critical elements of tax and assurance, our industry-differentiating advisory services set us apart. With additional strategic practices under one roof, we’re uniquely positioned to build long-term partnerships dedicated to helping companies realize their full value through comprehensive accounting, advisory services, and genuine relationships.
Expertise in Transaction Advisory Services
Our Transaction Advisory Services team is committed to advising business leaders and their investors as they approach financing and exits. With hundreds of transactions under our belt, we’re exceptionally equipped to navigate even the most complex deals. Our quality of service rivals that of any firm on the coasts, and our value delivery approach often exceeds expectations.
From Quality of Earnings to operations process analysis to post-transaction synergy implementation, Tanner partners with you to protect your business and ensure a successful outcome. Regardless of market conditions, we’re here to help you right the ship and steer toward success.
By ensuring your business is prepared and strategically aligned, you can navigate the choppy waters of market volatility with confidence. At Tanner, we’re more than just advisors—we’re your strategic partners, dedicated to your success in every transaction and beyond.