For those considering a Sale or Exit from your business, here are some simple tips:

Scale

Every buyer or investor in SAAS businesses wants to know what the growth of the business can be should they acquire or invest in your business. Some answers you will need:

• Is the product limited to a particular Geography?

• Is the product limited by market size?

• What percentage of the market is occupied by competitors?

• What is the addressable market, units and $

• When you lose to a competitor, what is the predominant reason for the loss, product functionality, price, sale behaviours?

• How do you attract leads?

• How scalable is your lead flow?

• Do you have a sales team that can execute on the leads?

And a bunch more questions..

Sustainability

Every buyer or investor in SAAS businesses wants to know what that the business is Sustainable. Some answers you will need:

• Do you have a management team in place, if so, who are the key people?

• What tech platform has the product been built on, is the product platform current? If it’s not current, don’t be deterred, buyers and investors will still proceed if they know there is a plan for the future of the platform.

• Do you have the right systems in place? SAAS businesses need fundamental systems in place like CRM systems, Web marketing tools, Billing and Revenue recognition systems (Ideally tools that can report on ACV, MRR, Churn, product mix). Again, if you don’t have the right systems in place, the buyer might see this as an opportunity to improve the business, they just want to know the facts.

• Is the company cash flow positive or is it burning cash to grow? Cash burn is fine whilst you are scaling, however the investor or acquirer will want to know the true cash position of the business.

• Do you have Talent plans in place for Key Personnel losses?

What does you product Road Map look like?

Summary

Every investor or acquirer will want to know the critical strengths and weaknesses of your SAAS business. They want to know what they will need to do post acquisition to realise the full potential of the business. If you need help preparing for a sale or exit, talk to us, we can help.

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