Selling a company is a complex, long-term project, and an accurate valuation is the cornerstone of good negotiations. But what if your company has hidden value that isn’t reflected in your valuation—capacity that you yourself may not even know about?
At The McLean Group, pre-sale value enhancement is one of our core services. We achieve dramatic results by adding value to key processes, particularly product development, sales, and operations.
The new processes we put in place are often designed to cause huge jumps in throughput and dramatic profit increases. Still, other clients benefit most from vibrant new improvement processes that, for example, reduce the time it takes to bring new products to market.
The differences aren’t minor—the last company we worked with to increase its valuation saw a 9-figure increase.
The client was a durable goods manufacturer, struggling with constraints on operating capacity. They weren’t able to complete some of their larger orders, and were suffering penalties that cut deeply into their profit margin. With more orders pending, they were facing a troubling downward spiral prior to sale.
Within a year, we were able to increase revenue by 50%, monthly throughput by 40%, and profitability by 240%. As a result, the valuation of the company increased by $100 million.
To produce these results, we spent time on the factory floor and with the team members, identifying the levers that would liberate capacity within the company. No additional capital was required to bring about a profitability increase very quickly; in fact, the rapid increase in the value caused the owners to sell right away.
Pre-sale value enhancement is an intense process, focused on the critical few variables that will make an organization more valuable at the time of sale. We create new value within the company, often without the use of additional capital, but our goals are far from short-term. We hand over a company capable of continuing to perform at a level that warrants the increase in valuation.