As someone who meets with hundreds of business owners every year, and as a past business owner myself, there are few topics that generates more diverse opinion than the viability of getting a business “under management”.
So, what does it mean for a business to be run under management?
Simply put, it’s about creating a business that operates efficiently without your constant involvement in day-to-day operations. Instead of the owner being the indispensable lynchpin, the key systems, processes, and a capable team are what keeps the business humming and ideally what drives the business forward. This shift not only allows the business owner more freedom but also significantly enhances the value of your business to potential buyers, as they view it as a low-risk, sustainable investment.
Most business owners that we meet see this as a fantasy – yet we have had the opportunity to appraise and sell multiple businesses for owners who have effectively made their business no longer reliant on them. I’ve seen this across all industries and with businesses of a variety of sizes and ages.
Transitioning to an under-management model requires a few deliberate steps.
These changes can take time, but the payoff is a business that’s less dependent on you and more appealing to buyers who are often looking for turnkey operations they can step into without extensive restructuring.
A business under management signals stability and resilience, reducing perceived risk. Buyers are often drawn to opportunities where they can oversee strategy and growth rather than firefight daily issues. This opens up your buyer pool to a broader range of investors, including those without industry-specific expertise, often leading to a higher sale price and faster transaction. By positioning your business as one that thrives under management, you’re not only enhancing its operational efficiency but also maximizing its market appeal.
Buyers Looking For Under Management BusinessesIn our experience businesses that are run under management sell three times as quickly as businesses that are owner-operated, and usually sell at a considerably higher multiple of profits – typically 30-40% higher.
MMJ currently have more than 25% of qualified buyer enquiries looking for an under-management business. For buyers looking for businesses over $1m in value this jumps to 65% of qualified enquiries.
If you'd like to explore how to take these steps and prepare your business for the next stage, we would be happy to assist. Let’s discuss how we can make your business a standout in the marketplace.
Is This the Ultimate Business Value Booster? Getting Your Business "Under Management"
Justin Bunt
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