Once upon a time setting up a business was a journey intended to last a lifetime and be passed down to generations. Today, many business owners go in with the goal of selling as a form of exit. Naturally, the experience and goals of business owners are highly individual. The motivations for launching are equally as diverse as the reasons one will eventually decide to exit. In this article we’ll explain how to get the business exit you deserve – with no regrets.
The key to any successful exit is in the planning. This means giving it serious thought sooner rather than later. If you want to exit at the right time and the right price, you need to be in control of the process early on. Whatever the motivation for exit and whichever route you take, getting trusted guidance and support will ensure you exit with no regrets.
Assess your options
It will take time and consideration to determine the best steps forward. The options need to be thoroughly assessed to make informed, financially savvy decisions, and it’s advised that you do this with a professional.
You need to consider:
- The value of the business
- Financial and legal status
- Anything that needs to be fixed to make the business more appealing
- Suitable buyers/selling strategy
- Your exit goals – do you want to make as much out of the sale as possible? Do you want the business to continue and keep your staff? How long are you prepared to wait to achieve the right outcome?
- Which option, with all things considered, will be most fruitful and achieve your objectives.
Essentially, with every moving piece or new consideration, you want an assessment done to see what that step could achieve for you. All of this will need to be captured to produce a comprehensive overview of your options to make the most informed decision about how to move forward.
Determine your strategy
How you wish to sell, or who you wish to sell to, will determine what you need to do to prepare the business for sale. That means you must form a relatively concrete plan from early on, but it’s never too late to start. Failing to have a firm strategy can risk time and money doing activities that take you in the wrong direction.
For example, one common preparation step before a sale is recruiting for a senior role where you perceive there’s a gap. If you did this and then later discovered that the ideal buyer already had somebody able to step into that role from their organisation, you may have spent significant time and money on activities that were not necessary.
Strategies can change, but you want to reduce the likelihood of that happening to prevent financial loss in the process. Each of these steps are mission critical. Without the assessments, you can’t make informed decisions on your strategy.
Prepare the business for sale
Preparing your business for sale involves understanding both the value of the business and the best strategy for achieving a successful outcome. This includes identifying the right time to sell, gaining clarity on what the business is truly worth, and understanding current market demand and potential buyers. It also means assessing the strengths of the business, identifying areas for improvement to maximise value, and ensuring the business is in the best possible shape to attract buyers. Alongside this, it is important to explore the different sale options available – such as an outright trade sale, management buyout, or private equity investment – and carefully weigh the advantages and disadvantages of each approach.
Perform valuations
Business valuations should always be completed by an expert with business exit experience. In this step, the business will be valued based on revenue trends and profits, potential synergies, industry sector dynamics, future growth potential, and the assets of the business. This information forms the basis of what is presented to potential buyers.
Engage buyers
This is two-pronged. First, you will need to find potential buyers and then enter negotiations with them. This is, again, best done by corporate finance professionals to ensure these interactions are as productive and thorough as possible, cutting no corners. Your exit consultants will put together a comprehensive sales package tailored to the type of buyers you are seeking, and they will carefully control confidential talks to work towards a sale, negotiating on your behalf to fight for the best possible outcome.
Close the deal
Once an offer is acceptable, there is a 60-to-90-day period of due diligence when the buyer will put all of your business under scrutiny. During this process, your corporate finance advisor will point them to the correct information, help to answer questions about finances and tax, and ensures this period of due diligence runs through smoothly. This stage will also include a legal professional, to cover any questions that may need to be addressed on that side.
Once complete, the sale is closed, and you’re free to move into retirement, take on your next venture, or even continue to have a role in the business.
The MGroup Business Exit Review
Our Business Exit Review is a comprehensive program designed to help you understand your business’s true value, explore exit options, and prepare for a successful transition. By answering key questions like “How much is my business worth?” and “What improvements will boost its value?”, we’ll help you focus on what truly matters. This way, you’ll avoid any pitfalls and make informed decisions to achieve the best possible outcome.
Whether you’re thinking about retirement, a new challenge, or just a change of pace, an exit is often a long-considered decision. Many owners have late-night reflections or spend years mulling over the idea. The secret to a successful exit is early and thoughtful planning. If you want to leave your business at the right time and at the right price, you’ll need to take control of the process as early as possible.
No matter your reasons or the path you choose, having trusted advice and support ensures you’ll exit your business confidently and without regrets.
How to get the business exit you deserve – talk to an experienced advisor
Contact Partner Geoff Pinder (07717 874357) for a confidential discussion and to find out how we can support your exit strategy.