A business friend of mine has just seen his company sale fall through for the second time in two years. I was planning to exit my own business within the next three years, but my friends experience has put me off. What do I need to do to make sure I don’t suffer the same pain?
Your friends experience is not uncommon, but can be avoided by thinking ahead, getting the business in the right shape to maximise sale problems, and making sure you get strong project management skills for the final exit process.
1. What’s the minimum value you want to realise?
2. What’s the minimum value you need to realise?
3. Do you want to total exit, or would you be happy with an on-going involvement?
1. Invest a small amount of time and money in ‘up-front’ advice to understand what your business needs to deliver in financial terms to achieve the exit values for you personally.
2. Also consider the ‘shape’ of what your business needs to look like to maximise value. Potential buyers will need to see a clear vision and forward strategy for the business, a strong, well balanced management ream (that’s isn’t too reliant on you), sound personnel policies and procedures, employment contracts that are up to date and in order, a good record of your customer contractual arrangements, an excellent health and safety record and no environmental issues. From buyers perspective it’s about minimising risk. Put yourself in their shoes.
The key message is DELIVER.
2. Make sure your exit forecasts are rock solid, otherwise they will be used against you to chip price.
3. Get your management thoroughly prepared to deliver great exit presentations – it can add millions.