Exiting Your Business
Maximise the value of your time and skill
Most people only sell a business once and the money raised, in whatever form or by whatever method, is usually critical to their future aims and ambitions. It is vital that plans are put in place to ensure the maximum value of the business asset is attained, whether it is a trade sale that is planned, a management buy-out/buy-in, or other means of realising the business’s accumulated worth.
There is a significant and atypically large number of business owners born between 1945 and 1955, who are in the process of preparing to sell their businesses in the next few years. Business Analysts report that the largest transfer of business wealth and assets in history is in the process of occurring. This will continue over the coming years.
Valuing and selling a business is the subject of a separate article on this site, and you should read that in conjunction with the information in this section.
Importance of the owner to the business
One of the most important considerations is the current and ongoing dependence of the business on its owner(s). The more the business relies on their day-to-day input, the less it is worth. Putting in place systems and processes that make the business work efficiently and profitably without their continual involvement, is key to maximising business value when the time comes to exit.
There are also issues of succession management and post-sale strategy - if the owner is not going to be around to manage the business, then who else will do it? Is there a second tier of management already in the business, who could take the business forward if the owner exited? Does the owner want to play a continuing role in the business in the event of a trade sale, and if so, what sort of role?
Planning for exit
Once these issues have been fully considered, one of two things usually happens. Either a company proceeds to find a buyer or buyers for the business; or a plan is developed covering what needs to be done to increase the value, in order to achieve an agreed amount. There are many and varied strategies that can be employed to help improve the value at sale; however, they need to be implemented in a step-by-step process over a sustained period of time.
Quick fixes and hasty decisions rarely produce the desired result. The best selling price is most likely to be achieved as a result of careful and lengthy planning. Having an outside and objective observer available to guide a company through the maze and discuss the various options available is invaluable.
Many ibd Advisers have been through the process of building up and eventually exiting their own businesses and therefore understand at first hand not only the key stages in the selling process but more importantly, the systems and processes which need to be in place before the sales process starts. This helps to ensure the maximum value is derived from a trade sale, or whatever exit strategy is employed.
We have identified the most important issues you may be facing if you wish to Exit Your Business in the links below - but please do explore the full Expertise menu on the left for a more comprehensive overview of the business disciplines we routinely deal with.