As global acquisitions are dropping to the lowest levels in almost a decade, with an alarming slump of 48% during the first 2023 quarter, entrepreneurs must deploy much more aggressive strategies to attract potential buyers.
Ultimately, when it comes to acquisitions, buyers are no longer looking at your balance sheet only. They are considering the bigger picture, evaluating your business from various angles. More importantly, they want to be assured of the acquisition’s long-term potential.
As such, this isn’t as much about being successful today, but also about being equipped to handle the challenges of tomorrow, and more precisely those that will come with an M&A. This is precisely why it is crucial for entrepreneurs trying to sell their venture to work ahead with business advisors, who can not only advise on the current valuation for the business but also on strategies that could increase the business value before a sale.
Strong cybersecurity
At an age where data breaches and cyber threats loom large having a robust cybersecurity strategy in place can significantly enhance your business appeal to potential buyers.
Indeed, cybersecurity is a recurring source of concern in M&A, as outdated technology, incompatible systems, and existing undiagnosed data corruptions can pile up and create risks during merging.
As such, more and more entrepreneurs are considering preparing for a business sale by proactively enhancing and improving their existing cybersecurity measures. Buyers are not only sensitive to potential risks, many are aware of the surge in costs that cybersecurity challenges can cause to an A&M.
A green strategy
Greenwashing concerns are on the rise, especially when more and more companies, including large corporates such as Ikea and Coca-Cola, have come under fire for promising more than they could deliver. Buyers are familiar with long-term no carbon objectives, and, therefore, will be favoring businesses that have already implemented a sustainability strategy. As environmental responsibility is taking center stage, contributions to a greener future will tip the scale in your direction. Whether this includes drastic manufacturing changes to reduce carbon emissions or innovative environmental packaging technologies, prospective buyers are looking forward to hearing more from green strategies.
Ideally, business acquirers are seeking new opportunities to align with sustainable and eco-conscious brands. Showcasing dedication to environmental measures and displaying your strategy and results can definitely heighten the chances of being acquired at a good price.
AI automation
In an era of technological advancements, artificial intelligence (AI) automation is a game-changer for M&A. Indeed, integrating AI solutions as part of day-to-day business operations can serve many purposes.
First of all, this will ensure buyers can work with historical data on all business processes, allowing them to better plan against the typical acquisition slump. With a baseline of operational metrics to work with, it is easier to account for a merger’s success.
Additionally, AI tools are equipped with high analytical abilities, enabling users to receive almost real-time analysis of high data volumes. This kind of tool can help forecast the course of the acquisition and warn of potential risks before they arise.
AI is designed to streamline operations and can, therefore, be implemented to streamline post-merger operations, too, reducing costs, loss of productivity, and ineffective process merging.
It makes no doubt that mergers and acquisitions need to evolve to meet the needs of a modern, post-pandemic, and post-inflation market. As lack of confidence is hindering further acquisitions, it falls into the acquiree’s responsibility to bring to the table the strategy and tools the acquisition needs to succeed.