In the present world, change is not only bound to happen but is going at a pace never seen before. Where markets, consumer behavior, technological changes, and shifting industry dynamics are making changes in the ‘old ways of doing business’ normal, business software companies, especially online platforms, have started hitting the public markets through initial public offerings in their two most recent years. This represents an evident shift toward a new age of business; in such a business environment, flexibility is vital to stay on course.
Market-Based Lessons
Every day, as M&A advisors, we evaluate sell-side offers in SMEs and MSME. We remain focused on companies that are up and running, making money, and continuously adding value. Experience, however, has taught us the harsh reality that no company can satisfy the valuation aspirations of its owners. Many of these companies, which were often founded three or four decades ago, have proved themselves to be robust over time. But living through the past does not guarantee living well in the future. Because selling a company is always about the future, not the past.
The Effects of Disruption from Technology
The world of technology is changing at a dizzying rate. Electric automobiles are replacing internal combustion engines. Artificial intelligence, Web 3.0, and blockchain are transforming sectors. What was innovative twenty years ago is now outdated. Market dynamics and tactics that once made companies successful are no longer applicable. Most firms are caught at the crossroads, which makes it impossible for them to keep up with this new reality, while a few others are able to adjust.
The Syndrome of the “Old Cow”
A majority of legacy businesses have reached the point of decline in returns no matter how big their previous wins may have been. They risk being categorized as a “old cow,” businesses once they were successful at delivering but with growing difficulties in current times. Old cows, notwithstanding, hold good promise. Companies can still bring in customers based on the strategy adopted. However, recognition of their current status and alignment of expectations with the reality of the market are important.
A Way Ahead
The message for entrepreneurs looking to sell is clear: the market prefers flexibility and possibility over legacy alone. The first step to a good deal is admitting this fact. It’s about accepting the opportunities that come with change rather than wallowing in the past.
It is imperative that salespeople realize that change is an opportunity and not a barrier as we navigate this dynamic landscape. It is those companies that will adjust, change, and meet contemporary needs that will thrive in the marketplace of the future.