Why Your Management Team Isn't As Important As You Think | Inc.com

Over at SellabilityScore.com, we've been studying the factors that contribute to both getting an acquisition offer for your business and the value of the offers acquirers make. Our latest analysis was completed in the first two weeks of July 2014 and included 9,779 businesses.

For me, one of the most interesting findings in the research is how little having a management team matters to the overall sellability of your business.

At first blush this may sound counterintuitive to advice you've heard elsewhere. After all, building a management team is one of the common pieces of counsel provided to any new entrepreneur.

Personally, I found that having a management team of senior leaders helped me to run my last company. When it comes to getting an offer, however, companies with a management team are only slightly more likely to get an unsolicited acquisition offer than those without one (17 percent vs. 16 percent). What's more, when we analyzed multiples offered, having a management team in place did not increase the value of offers received.

Keep in mind that most of the factors we measured had a significant impact on offer multiples, so the absence of any lift among companies with a management team is surprising and noteworthy. For example, having a monopoly on your product or service increases offer multiples by an average of 43 percent, while growing your top line revenue by 30 percent or more juices your likely offer multiple by 33 percent. So it came as a surprise to us how little having a management team matters when it comes to either getting an offer or the offer's value.

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Why Your Management Team Isn't As Important As You Think | Inc.com:

For additional information regarding Florida business sales, acquisitions and valuations, please contact Eric J. Gall at info@buysellflbiz.com or 239.738.6227. Also, visit our Florida Business Exchange website at www.fbxbrokers.com and my personal website at www.buysellflbiz.com.