8 ways to make your A&E firm more attractive to buyers

Just like a home, your A&E firm needs occasional updates, even if you’re not considering selling. Being mindful of what drives value can protect your firm’s financial health and create a better workplace for employees.

So, where should you focus your attention?

8 ways to make your A&E firm more attractive to buyers 

When it comes to A&E firms, buyers look at hard data to determine what a business is worth. That way, they can make objective, evidence-based decisions about multiple valuation factors.

To make your firm more attractive to buyers, make sure you’re managing:

1. Public information: This includes public records and data available from government or paid services, including online records that could affect the company’s reputation. 
2. Comprehensive financial statements: High-value companies keep orderly accounts of their revenue, expenses, cash flow, assets, liabilities and more. Buyers need to see at least three years of earning statements and complete financial statements to inform their valuation. For A&E firms, the most common valuation approach is the income multiplier. 
3. Performance history: Buyers want to see signs that the business can increase in value, such as consistent margins, controlled expenses, marketing wins and customer loyalty.
4. Growth prospects: While sellers often emphasize past and present factors, buyers focus heavily on the projected value of a business or industry. 
5. Investments in growth and competitive advantages: Forward-thinking leaders invest judiciously in future capabilities, not just immediate transactional needs. Less-quantifiable factors weigh in too, such as:
6. A diverse customer base: If your business relies heavily on one or two key accounts, your valuation could be at risk. Buyers like to see account portfolios that are diverse in terms of size, location, contract type or market sector.
7. Management depth: Buyers want a capable and stable leadership team to come with the business. 
8. Employee stability: People make products and services possible. In addition to a solid leadership team, buyers are also sensitive to the skills mix and engagement level among employees. Attracting and retaining top talent can protect business continuity and drive value. 

Increase the valuation of your A&E firm

How can you influence these factors and drive your A&E firm’s valuation? Have open conversations with your leadership team, and institute routine performance checkups that include realistic metrics for each of these areas.

Your management view should cover all relevant company, industry and market factors. Consult with accountants, tax advisors, attorneys and bankers to expand your leadership conversations and position the team for success.

Investing time and attention to these matters now could yield a substantially higher valuation when a transaction opportunity is on the table. 

How Wipfli can help

From conducting a business valuation to performing due diligence, sellers have a lot to do before they’re ready to take their company to market. The right approach is critical. Let Wipfli help. You can count on our transaction advisory services team for trustworthy advice. We have a deep bench of experience in A&E. Contact us today to learn more. 

Related reading:

• Don’t let successor liability catch you by surprise
• Good data integration may make or break an M&A
• Understanding calculation versus valuation engagements