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Client Success Story - Developing a sound commercial strategy

A client approached us last year with a problem you usually only read about.  They had a legal dispute with a much larger business and it was quickly going to end up in the court system where the lawyers would win more than our client. 

The larger business had made an offer to buy our client's business to avoid further legal disputes, but the offer did not represent a fair value.

The dispute was having a significant impact on the operations of the business as the owner was not focused on the right things in the business, too busy dealing with the stress of the dispute. 

His growth had not only flattened off, which was effectively reducing the value of his business, but also his own stress levels had increased dramatically.  All this was happening at a stage when the business owner was looking to exit the business and enjoy life.

Instead of simply trying to record the value of the business only for it to be disputed in court, we looked at developing alternatives for the business owner to find a solution that did not involve large legal fees. 

That meant they needed a strategy that would help them reach a negotiated outcome.

The Project

  • Find the best strategy to reach an agreement that maximised the value to the owner of the business.
What We Did:

We conducted a series of meetings with our client that illuminated the value of each alternative.  This involved:
  1. Identifying the commercial options available.
  2. Developing a cash flow projection for each option.
  3. Assessing the net value of each option to the business owner.
  4. Developing an effective negotiation strategy based on documented analysis.
Armed with documented information and a simple negotiation strategy, the client and the other party eventually reached an agreement, and it didn’t involve lengthy a court battle.   This process was made so much easier because our client had a solid understanding of what drove the value from the buyer’s perspective.  Our client didn’t just pitch their own ambit claim – the negotiation was based on understanding each of the options from the buyer’s perspective.

Client Outcome:

The original offer made by the larger company was more than doubled and settled immediately the contract was signed.

How Can We Help Your Business?

Businesses often have to decide between different scenarios or strategies, and in some cases the only way to compare different cases is to look at the overall impact on the value of the business that each case has.

Our experience and processes at investigating and assessing the value of different business strategies means we can introduce a fresh, external and independent perspective and come up with quick results.

We have used a similar process to:
  • Assess different business expansion options.
  • Develop commercial strategies for investment.
  • Compare the value of selling or holding onto a business or division.

Getting Ready
  • Understanding the current value of your business.
  • Identifying the value that other strategies can create for your business.
  • Are you ready to sell or buy?

Buying a Business
  • What is the value of the business to you?
  • What is a fair value for the business?
  • What are the commercial strategy options?
  • How do you decide which commercial strategy option to pursue?

Selling a Business
  • What is the value of your business to different buyers?
  • How can you influence the value of your business?
  • Who are your potential buyers?
  • What are your commercial strategy options: expand, consolidate, sell or hold?

Succession Planning
  • What exit strategy options are available to you?
  • How can your business finance your exit?
  • How will the business continue to be successful after you leave?
  • What do you have to do to prepare the business for your exit?