After the ongoing uncertainty of the COVID-19 pandemic has settled, it’s going to be stock-take time for many business owners. To be best prepared for success as the market begins to open up again, you should fully understand your strategy in a post COVID-19 world, the path to growth, the value of your business and if you are correctly set up both from a corporate structuring and operating model perspective. Having a clear picture of these areas, will help you in making well informed business decisions down the line as the economic climate continues to shift.
The first area that needs to be critically evaluated is your strategy and operating model. Are you set up for survival, maintenance or growth. Each of these strategies requires a different corporate and organisational set up and changes the decision making process when it comes to scarce resources like your people and your money. Once we have understood this we can begin to look at how the business is structured, how the business is valued and if the business requires funding.
1. Strategy and operating model assessment – assessment of your current strategy and the forecasts to ensure that the strategy is fit for purpose and that the financials and forecasts support an organic or acquisitive path if the strategy is one of growth; that the costs are assessed for reductions in the case of a maintenance or survival strategy; that the skills and capacity of the organisation are fit for purpose and set up for the future; that the market, product and channel assessment has been critically evaluated in a post COVID-19 world and that the business is as digitally enabled as it needs to be.
2. Business structuring – this looks at how the business is structured with a view to gaining comfort around your set up for asset securitisation, commercial securitisation, tax minimisation, fund raising and exit friendliness
3. Business valuation or tax impact valuations – A reasonable business valuation or tax impact valuation will consider all variables and allocate their relative importance accurately. This could cover everything from historical profit margins to projected revenue, return on investment, assets held, and in some cases, community contributions. A number of different valuation methodologies exist and understanding which is the most applicable is not as easy as it looks. As you can probably appreciate, there’s no perfect one-size-fits-all valuation method for every business. In many situations, a combined approach is the most useful and accurate.
4. Funding modelling and assessment – Developing financial models for the future to evaluate cash flow and funding requirements takes a certain amount of experience, realism and vision. This then needs to be built into a story and pitch deck that can be sent to a very focused group of funders who will understand and believe in the business
How can Halkin Business Partners help?
The financial, strategy and transactional specialists at Halkin Business partners can assist you in any of the above steps depending on where you are in your journey – empowering you to make fully informed decisions for your business in the future.