There are a myriad of factors that ultimately influence the sale price of a business in a transaction. By properly addressing those factors prior to going to market, sellers can eliminate surprises and work toward commanding a more favorable purchase price.
For manufacturers and distributors, one area that may be overlooked prior to engaging in a transaction might be their supply chain—including raw materials and/or product inventory. By addressing supply chain challenges early, along with any inventory issues that may negatively impact cash flow and/or revenue, sellers have a better opportunity to correct any issues and communicate the best story regarding the state of their business to interested buyers.
Rob Kress, CEO of Waypost Advisors, joined Joe Hellman, partner at Redpath and Company, to discuss the impact of a company’s supply chain on revenue and cash flow—and what business leaders can do to improve their current state.
Rob advises clients to consider three key areas or concepts to address supply chain and inventory challenges in order to be better prepared to go to market with their businesses.
Companies have not “de-risked” their supply chains post-pandemic. One of the ways to do this is to diversify their supply chain by looking at where materials and products are sourced. But they need to also balance de-risking their supply chain with the potential cost impacts of doing so.
Rob encourages businesses to see what else is out there for suppliers and ways to make supply chain improvements. Don’t be satisfied with the status quo. Your competition is most likely already doing these things and you need to ensure you can keep up—and surpass them.
Waypost Advisors is an end-to-end supply chain consulting firm serving middle-market clients. Visit https://waypostadvisors.com/ for more information.