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Home  Merger and Acquisition Revealed Some Actions to Take to Develop an Exit Strategy
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Revealed Some Actions to Take to Develop an Exit Strategy |
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Written by David Willetts
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If you are a business owner and wishing in the not too distant future to exit your business, now is the time to start the planning process.
But Why now?
If you are a business owner and wishing in the not too distant future to exit your business, now is the time to start the planning process.
Why?
Simply if you wish to maximize the value of your business at your targeted exit date planning must be undertaken. It will be advantageous to demonstrate a proven and improving track record of success to substantiate a business value, rather than only relying upon anecdotal evidence of future expectations.
It is generally accepted that exit preparation work should start at least 2 years before exit date. This should allow time to ensure managers are trained and capable of managing in your absence and that actions are taken to maximize profitable growth and cash flow, policies and procedures are documented and implemented to support a controlled environment and that financial numbers are reported on a regular basis.
The benefits of such actions should be reflected in the business sale value with some common arguments designed to lower the purchase price being dismissed.
The buyer will be less inclined to demand that payment is deferred perhaps in part, because the owner still takes all management decisions. The success of the business should be demonstrated to be attributable to all the management team, not the owner alone. In addition the existence of good management data, prepared regularly and supported by quality focused systems and procedures will overcome the potential claim of insufficient relevant information to justify the required selling price.
If you are considering exiting your business seek advice at the earliest opportunity. Help received at an early stage will be more cost efficient as opposed to the cost of re-acting later.
Do you have the professional financial management expertise to see you through the sale process? If not, consider engaging a part time finance director to help you develop your exit strategy and add value to your business. Call DAW Consulting for an informal discussion:
Telephone: 01384 835314
Mobile: 07973 383802
e-mail:
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Contact: David Willetts
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