What’s Your Exit Strategy?

Exit Sign

An exit strategy is the plan you put in place when selling your business. Sometimes this is something that happens quickly; if for instance you didn’t intent to sell but have received a fantastic offer, and sometimes this is something that has been prepared for a long time, if you always intended on selling. Either way, it’s important you get it right to ensure the best price and a smooth transition.

If you’re planning on selling the business, and have yet to find a buyer, then the following tips may help you get your exit strategy right. For more detailed help, Axis Partnership offers seminars on the process of selling a business.

Define Your Goal

The easiest way to structure your strategy is to define your ultimate goal, and then work backwards from that. In most cases, this target will be the price you wish to achieve. This needs to be realistic; there’s no point aiming on a very high figure unless you know you’ve got the time to get your business to that level, and the market conditions are right.

Using a sound valuation system, you can come up with a figure, and then identify the gap (if there is one) between where you are now and where you need to be. Jumping into your plan without having a target in mind can mean not getting the best price in the end. HMRC has some useful information on using the balance sheet to help make a valuation.

Put Your Plan Into Action

There are two main things to keep in mind when planning, and they are the continued running of your business, and the presenting of it to potential buyers.

In the term leading up to the sale, a strong management team is essential for two main reasons. The first is that it will naturally make your business more valuable, and secondly, it will afford you the time it takes to sell the business. Making valuations and negotiating with buyers can easily be a full time job, so you want to make sure it has your full attention.

There are three primary things that will attract buyers, and they are: the brand, the client or customer base, and infrastructure and assets. Presenting these to their best is of vital importance, and the way you go about doing this will vary massively depending on your business.

What you should remember throughout the process, is that you must put in all the effort you can if you are to achieve your desired selling price. Selling takes effort.

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