Exit Strategy: 5 Key Areas To Focus On
Selling up and exiting the business is a major chapter in your business journey.
But if you’re going to get the maximum return on investment (ROI), it’s vital to have an exit plan and to think seriously about how you add value to the business in the run-up to selling.
Forward planning prior to a sale is crucial. It’s generally accepted that a five-year exit plan is needed before you even think about putting the company on the market.
Having this five-year plan gives you a foundational route map to follow and allows you to consider the important areas of the business that may need work and improvement.
Selling up and exiting the business is a major chapter in your business journey.
But if you’re going to get the maximum return on investment (ROI), it’s vital to have an exit plan and to think seriously about how you add value to the business in the run-up to selling.
Forward planning prior to a sale is crucial. It’s generally accepted that a five-year exit plan is needed before you even think about putting the company on the market.
Having this five-year plan gives you a foundational route map to follow and allows you to consider the important areas of the business that may need work and improvement.
Let’s Look At Five Critical Ways To Add Value
Increase your profitability.
Potential buyers want the comfort of knowing they’re buying a profitable business. Take action to improve your margins, reduce costs and increase revenues. A company with clear profits is a far more attractive option to buyers.
Strengthen your financial performance.
Cash is king, so buyers will be looking for positive cashflow and good financial health. Work on improving your cashflow position, reduce debt and strengthen the balance sheet to demonstrate your financial stability.
Enhance your customer relationships.
Buyers will be looking for a strong and loyal customer base. Put plenty of effort into nurturing your relationships with customers, so you can offer a business model that has genuine brand loyalists and satisfied customers.
Invest in your growth.
For your business model to be viable, you should be able to demonstrate your ability to grow. Develop new products and services, diversify into new markets and invest in the talent and resources needed to expand and scale up.
Prepare for due diligence.
Any serious buyer will want to carry out due diligence checks on the business, prior to making an offer. Organise your financial records, contracts and other relevant documents (having cloud access is ideal) and make sure any legal disputes or bad debts are resolved well before starting the sale process.
Increase your profitability.
Potential buyers want the comfort of knowing they’re buying a profitable business. Take action to improve your margins, reduce costs and increase revenues. A company with clear profits is a far more attractive option to buyers.
Strengthen your financial performance.
Cash is king, so buyers will be looking for positive cashflow and good financial health. Work on improving your cashflow position, reduce debt and strengthen the balance sheet to demonstrate your financial stability.
Enhance your customer relationships.
Buyers will be looking for a strong and loyal customer base. Put plenty of effort into nurturing your relationships with customers, so you can offer a business model that has genuine brand loyalists and satisfied customers.
Invest in your growth.
For your business model to be viable, you should be able to demonstrate your ability to grow. Develop new products and services, diversify into new markets and invest in the talent and resources needed to expand and scale up.
Prepare for due diligence.
Any serious buyer will want to carry out due diligence checks on the business, prior to making an offer. Organise your financial records, contracts and other relevant documents (having cloud access is ideal) and make sure any legal disputes or bad debts are resolved well before starting the sale process.
Talk To Us About Your Exit Strategy
Are you planning to sell up in the medium to long-term future? If you’re currently without a firm exit strategy, now’s the time to start setting out your plan and getting the company in order.
Talk to our team about your exit and retirement plans. We’ll help you focus on the key aims for the sale, your exit strategy, succession plan and adding tangible value to the company.
Are you planning to sell up in the medium to long-term future? If you’re currently without a firm exit strategy, now’s the time to start setting out your plan and getting the company in order.
Talk to our team about your exit and retirement plans. We’ll help you focus on the key aims for the sale, your exit strategy, succession plan and adding tangible value to the company.
