Technology - A Distributor’s Key to Higher Valuation
“Company A acquires Company B”: a headline all too common for any one of us to have missed. The pandemic has added fuel to the fire and growing distributors are eager to acquire players that want to hand over the reins in this volatile environment. The pace is only set to pick up in the coming months.
As a distributor, you are likely in one of three lanes: (i) ready to sell for an excellent valuation, (ii) in the hunt to grow by acquisition, or (iii) planning to stay the course and grow quickly and organically. In all cases, your sales, operations and ability to scale efficiently will drive success. In the age of online ordering, a few facts are common across the board. Average order size is declining, order frequency is increasing, and finding good employees is next to impossible. Scaling efficiently equates to a strong technology platform that handles volume without a corresponding increase in costs.
Ready to Sell
Looking to sell and want to get top dollar for the company you have poured your heart and soul into for years? To get top dollar, you have to show that:
1. Your business is scalable: A cohesive structure that scales quickly is a key component of high valuation. Scattered information, multiple systems that do not talk to each other or high dependency on employees working in silos are tell-tale signs of inefficiencies that highlight a poorly run business. . In a tech heavy environment, a strong and well structured system often forms the backbone of a well run organization.
2. Business intelligence in structure not individuals: A cohesive platform that quickly absorbs new people, adjusts to someone’s absence and shares information efficiently provides a scalable structure.
3. Revenue is important but also profitability and growth: Automation provides support from proposal-to-cash tells the buyer that acquiring your business will help them scale without a corresponding increase in costs.
4. Not limited by time & distance: 24x7 access from anywhere is no longer a catch phrase. Secure access, PCI compliance and always available infrastructure for all employees to be most productive from anywhere are keys to scaling a business. It’s a base requirement.
In the Hunt
Whether you are buying a business or buying revenue, you need a platform that provides a cohesive structure for managing and scaling through an acquisition. Transparent and automated commissions calculations, built-in accounting and financial reporting, inventory management and open API integrations are just a few of the important components that simplify and facilitate a painless acquisition.
For those ready to scale their business, there is a good chance you have outgrown the system you grew up on. Scaling is about pushing past barriers and creating efficiencies that put every member of your organization in a better position to succeed. One way your system can achieve this is by creating automations that eliminate manual entry and manual processing of individual orders, payables, receivables and commissions. Your system should put you in a position to only manage exceptions and keep your salespeople focused on selling.
Putting your business in a more profitable and efficient position for long term growth should be an exciting venture. As business leaders and owners, one has to see through the instinct to resist change and see beyond the visible. Seek out a technology partner that is invested in your growth and committed to enhancing your business on their platform.
Aturian is one of the few platforms built exclusively for promo distributors. It is a 100% cloud-based platform with a full accounting suite, ordering, and inventory management system that is designed to support any midsized distributor. Aturian uses integrations as a core principle to easily align with e-commerce platforms and offers open API for integration with systems of your choice.