Knowing the difference can build your company exit valuation
The future acquirer of your business will want to be excited by the growth potential your company has going forward under their ownership. To build this excitement in a way that gets them to consider placing a premium value on your company, you will want to ensure you can exhibit an optimal sales model for pursuing and capturing your various types of revenue opportunities. These revenue opportunities are often comprised of squirrels and elephants.
The squirrels are smaller revenue opportunities for your business, the elephants being the larger ones. Ask yourself this question – is the selling effort and process that is needed in my industry to secure a squirrel order similar or different than that which is required to capture an elephant? If you’re fortunate to say they are the same, then you most likely just need one sales model. However, if you see there are differences, then you’ll want to build a sales model that shows your team knows the difference and approaches each effectively. The squirrels many times take shorter timeframe to close the deal and require no or less complex negotiations. The elephants on the other hand may take more time as their size brings new levels of complexity and more people involved in the customer decision process and the negotiating to close the deal may be much more challenging.
Now ask yourself this next question – is my sales team good at capturing both squirrels and elephants or are they better at one versus the other? The skills needed are different for each and sometimes even the sales person compensation model needs to be different. You want a squirrel hunter focused and thinking about the best sales technique for a smaller deal but the elephant hunter, who also needs to be very focused, may need to apply a different sales technique. What some businesses find is that through the course of the day, it’s inefficient and less effective for some salespeople to move between squirrels and elephants and lose focus on one or the other. These companies often find benefit in having sales resources focused on one versus the other so they can perfect their selling technique for each.
If yours is a company that does sell to squirrels and elephants, talk with your leadership team about your sales model and your sales team to determine if each is optimized in how you approach your smaller versus larger revenue opportunities. Investing this time and identifying any opportunities for improvement could greatly help you build the future valuation of your business in the eyes of an acquirer.
