Financial statements and EBITDA do not always explain how an SME actually generates its results. During a sale process, a buyer may want to analyse margins by customer, product, channel or market. Preparing this information in advance helps the company enter negotiations with clearer, more consistent and verifiable data.
An SME can report strong results despite ageing machinery and delayed investment. During a sale, however, the capital required to maintain production may affect the company’s valuation and the terms of the transaction.
Many SMEs own the factory, offices or premises where they operate. For the entrepreneur, the property often represents financial strength and the result of investments made over many years.
If production continuity, know-how and key decisions depend on one production manager, a valuable employee can become a significant risk during the sale of an SME.
Supplier dependence arises when an SME cannot ensure operational continuity, margins or delivery times without relying on a small number of key suppliers.
When an entrepreneur thinks about the value of their company, the focus almost always goes to revenue, margins, EBITDA and growth prospects. Much less often, the starting point is an apparently operational question: how much capital is tied up in inventory?
For an SME, winning a major customer can feel like a turning point. Revenue increases, reputation improves, and the company gains credibility with banks, suppliers and the market.
In many SMEs, the same scene repeats itself every week. An important customer calls the entrepreneur directly. The most delicate negotiation lands on their desk. An out-of-policy discount needs their approval. The sales team manages the relationship, but when the decision really matters, the founder steps in.
There are companies that work very well, as long as the same person is always present. The founder knows the clients, decides prices, solves production problems, deals with the banks, reads the numbers, manages suppliers and keeps people aligned. Everything works because he or she is there. Always.
Your company has grown, but it may not have become stronger. This is the paradox faced by many SMEs. More revenue, more clients, more people, more market presence. But also more urgency, more decisions to make, more investments to support and more complexity to manage.
