Why a Clear Strategy is Your Key to a Successful Sale

You’ve poured your heart and soul into building your business. Years of dedication, long hours, and a good dose of intuition have brought you to where you are today – contemplating the next chapter through a potential sale. You know your business inside out; the ‘secret sauce’ of its success lives largely in your experience and understanding. But as you prepare to attract serious corporate buyers, that implicit knowledge needs to become explicit. A clearly articulated strategy isn't just corporate jargon; it's the key to showcasing your business's true value and securing the best possible deal.

For many successful small businesses that have grown organically, the idea of formal strategy might seem unnecessary, something for larger corporations. Your strategy, up until now, might have been more of a guiding principle in your mind than a documented plan. However, for sophisticated buyers, this lack of a visible, well-defined strategy can be a red flag, potentially lowering their valuation and interest. 

So, why is this ‘strategy on paper’ so crucial when you’re looking to sell? Corporate buyers are looking for more than just a profitable entity; they're assessing future potential, risk, and how your business will integrate into their existing operations. A well-articulated strategy demonstrates:

• Clear Direction and Purpose: It shows buyers you knew where you were going and had a plan to get there. This instills confidence in the business's past performance and future prospects

• Focused Target and Positioning: Buyers want to understand who your core customers are and what makes your offering unique and valuable to them. This reduces perceived risk and highlights a defensible market position

• Sustainable Competitive Advantage: A defined strategy outlines how you have managed to win in the marketplace and what underlying capabilities support that success. This is crucial for long-term value

• Scalability and Growth Potential: A clear strategy often hints at untapped opportunities and a framework for future growth, making your business a more attractive acquisition

• Reduced Integration Risk: When your strategy and tactics are clearly documented, it signals to buyers a more predictable and manageable integration process

The challenge, as you recognise, is how to translate the ‘strategy in your head’ into a compelling narrative for potential buyers. The good news is that the fundamental elements of strategy can actually be quite simple. Furthermore, using parts of the framework outlined in "Playing to Win” by AJ Laferty and R. Martin, can provide a clear structure for thinking about your business's strategic choices

Here’s how you can start to articulate the strategy that has driven your business’s success:

1. Diagnose Your Past Successes

• Reflect on your "Winning Aspiration”: What was your core ambition for the business? What did 'winning' look like to you in the early days and as you grew? Even if it wasn't formally written down, what was the driving force?

• Analyse "Where You Played": Who were your primary target customers? Which products or services performed best? What geographical areas or distribution channels were key to your growth? Be specific. Remember, if your audience was ‘everyone’, you were likely reaching ‘no one’ effectively. Even if you didn't conduct formal market segmentation, think about the common characteristics of your most loyal and profitable customers. Develop a mental "persona" of your ideal customer.

• Understand "How You Won": What was your unique approach? What made customers choose you over competitors? Was it price, quality, service, a specific niche, a unique channel? Articulate your value proposition clearly, explaining why customers chose your solutions, rather than your competritors. Your customers had a choice, to buy from your competitors, to do nothing, or to buy from you. They chose you, why?

2. Define Your Target and Positioning

• Who were you targeting? Develop a mental "persona" of your ideal customer.

• What did you want your brand to stand for (positioning)? Work out what the key messages are that you have consistently conveyed (even informally). And what two or three things do you think your customers associated most strongly with your business? Write these down. Don’t overcomplicate it with layers of brand jargon .

3. Outline Your Key Objectives and Tactics

• What were your most important objectives? Think about your key goals over the past few years. Even if they weren't SMART (Specific, Measurable, Achievable, Relevant, Time-bound), what were you striving to achieve in terms of growth, customer acquisition, or other key areas?

• How did you aim to achieve these objectives? This is where your tactics come in. Think about your approach to the "4 Ps" of marketing

◦ Product: How did your offerings solve customer problems?

◦ Price: How did you price your products/services relative to the market and your value proposition?

◦ Place (Distribution): How did you make your offerings accessible to your target customers?

◦ Promotion: How did you communicate your value and reach your target audience? Don't just list activities; explain the purpose behind them.  Consider the customer journey from initial awareness of the problem they needed to solve, through chosing to solve it with your offering, and ultimately to advocacy for your organisation and brand.

Remember, strategy comes before tactics. Buyers of companies will be more interested in the underlying strategic thinking that guided your tactical decisions than just a list of past marketing campaigns.

By working through these questions, you'll begin to extract the implicit strategy that has been driving your business. Documenting these elements in a clear and concise manner will transform your business from one with ‘potential’ to one with a demonstrable track record and a clear path forward, significantly enhancing its attractiveness and value to potential corporate buyers. Don't underestimate the power of articulating the ‘why’ behind your success – it's the story that will truly resonate with those looking to invest in your vision.