Our Business Advisory Services
Africabrokers have the experience and expertise to provide important business advisory services to our clientele in the SMME sector . Our typical business advisory services include:
Strategic planning workshops and advisory service
• Executive insight sessions to explore and discover the “not so top of mind issues that exist in the organization as part of the SWOT analysis”
• Clarity of vision, mission, purpose and direction
• Review of industry, markets, products, processes and people
• Review of past financial performance and non-financial performance.
• Developing strategic initiatives to drive value creation.
• Allocation of key strategies to specific role players.
• Developing a strategy implementation plan
Performance management and balanced score cards
• Linking individual performance to strategic objectives and targets
• Developing balanced score cards at organizational and departmental/functional levels
• Making performance measureable and manageable
• Developing key result and key performance indicators
• Evaluation of performance systems
• Improving performance
• Aimed at setting up new businesses or divisions
• Aimed at raising funds from private and government institutions
• Refocusing an existing business.
• Covers strategy, marketing, sales, finance, budgets, cash flow, human resources and internal business processes.
• Where appropriate a business valuation and readiness assessment
Business valuation (to provide a professional value of equity and goodwill). Valuations are performed
• To prepare for sale or purchase of a business.
• To intentionally cultivate business value over time.
• Looking at your business as a prospective buyer would.
• Determine a buy-out price of a partner.
• For estate planning.
• For divorce settlement.
• For an Employee Share Ownership Plan (ESOP)
• To help find finance-to demonstrate that the business is worth more than the balance sheet.
• Keep investors in a Private (Equity) firm informed.
• To assess the Income potential and Risk in a business you are selling or buying.
• To assess the value of the business assets prior to dissolution, re-organization or Business rescue.
• The audit of historic financial information
• The audit of ownership, assets, liabilities, customer and supplier base
• The verification of compliance in terms of applicable legislation
• Banking and other financial arrangements
• The verification of licenses, authorities, agreements and other operational items
• Providing an opinion on the operational and financial risks and the potential of mitigation where appropriate
• Evaluation of business opportunities and projects
• Evaluation in terms of the potential favorable outcome of the project
• Evaluation of the risks, the return on investment and success rating
• Scenario building to select from various options
• Providing an opinion on the risk and return of the potential project.
Investment Readiness Assessment
Why perform an investment readiness assessment prior to selling? Buyers shy away from investing in businesses because of the high perceived risk, and secondly because they are only able to interrogate the past, and in reality, they are buying into the future, and if that future has been explored and fully valued, it makes it possible to enter into negotiations with confidence with the majority of their questions answered and high level diligence done.
Sellers are keen to know whether they assessed their own selling price correctly, and want to go to market knowing that they are not underpricing or over charging. Both of those possibilities can have serious consequences in the probability of selling. Knowing the investment readiness level of the business makes it possible to postpone and optimize for later sale, or go to market with a full back-up of their price and value offer.
In a nutshell, investment readiness covers the following aspects:
• Current organizational structure.
• Current business model.
• Products and services.
• Leadership and ownership structures.
• Market positioning and general marketing.
• Sales performance.
• Financial performance.
• Human resources management.
• Broad competitor analysis.
• Other micro elements.
Market and distribution channels.
Product and brand.
Cost of capital.
Complexity of business.
Customer profile and customer base.
Size of business.
Government regulations and restrictions.
In addition, to do a comprehensive valuation, with a valuation due diligence, based on past performance and potential future performance with various opportunities identified factored in. Valuation due diligence covers the very important aspects:
• Is the business a going concern?
• Is the business solvent?
• Does the business have a sustainable business model;
Does it have a value platform?
Successes achieved in the past?
What will make it successful in the future?
What value drivers are in place and managed.
Estimation of future earnings?
Are assets fairly valued?
What level of investment in assets and working capital is required to optimize future performance and also value, by when and how?
Financial models with various scenarios based on various strategic options.
Valuation approaches are dependent on whether COST, INCOME or MARKET approaches are applicable and each has its own valuation methods. Secondly is the business primarily asset based or people based. Is it income producing or non-income producing? Using the correct primary and secondary valuation methods, tests and calculations, to arrive at a realistic value.
Are the recognized, correlated, success predictor management practices in place?-strategic management, performance management, human resources management, sales and marketing plans, risk management and team practices.