You can’t change the fundamentals, but you can put them in the best light.
Now that I am zooming so many meetings, I was happy to learn that Zoom offers a “beauty filter” that will touch up your appearance. It evens out skin tone, touches up lighting and makes minor adjustments. Of course, I made sure mine was on. This is not one of those editing tools where people end up with three arms or missing a leg. This is a “you but better tool”. It honors beauty and truth. That got me to thinking about how sellers (and their advisors) “use the beauty filter” while preparing their marketing materials.
We do use a “touch up your appearance” feature. We lead with company strengths that buyers are looking for. The “beauty filter” highlights your positives for great first impressions. When a buyer sees that you have a strong gross margin, they keep reading. It won’t change the fundamentals and it won’t and shouldn’t hide anything. We recently came across an example where the beauty filter was pushing the limits of truth.
Our client (a buyer) asked us to evaluate a seller’s materials. When we dug into the facts, we found that the “average” client size was heavily skewed by one large recent addition. That same set of clients had been skewed toward a longer “average” length of time as a client by using many long-time smaller client accounts. A little digging revealed that might have been due to the seller’s lower-than-market rate pricing. So it looked like the majority of the clients had been there forever, but the 80/20 rule was at work. 80% of the revenue was coming from 20% of the clients. And the clients in the 80% had only been on board for one year or less.
Of course, it all comes out in the due diligence or sooner (one hopes). Best practice is to highlight the seller’s positives making sure that no facts are obscured with too strong a filter. The trust generated with a book that is truthful will pay off as negotiations are carried on.
We’re here to help. If you would like to have a confidential discussion about your plans please give me a call or email. Alison at 224-688-8838 or email me at [email protected].