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Planning Your Successful Exit
For a successful exit, you need to be able to say a hearty “Yes!” to two important questions:
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Is your business ready for you to exit?
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Are you ready to exit?
Point 1, in determining if your business is ready to sell, can be done by completing the Value Builder Score. Business owners who receive a score of 90+ on their company double the value and receive double the offers than the average business owner’s score. Get your score to evaluate how ready your company is for you to exit.
Point 2, equally as important. Are you ready to exit? Follow the 5 step process below.
STEP ONE
Get Clear on Why You’re Exiting
Why do you want to exit your business? In most cases there are a combination of factors that are either “pushing” you away from your business or “pulling” you to something else. Push factors are legitimate reasons to want to exit your business, while pull factors are things you want to do after you leave your business.
Typical Push Factors
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Reaching retirement age
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Feeling your business has reached its peak
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Worrying you have too much of your wealth invested in one asset
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Getting bored
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Experiencing a health issue
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Needing a break to reduce stress
Typical Pull Factors
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Spending more time with family and friends
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Itching to travel the world
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Deciding to get fit and healthy
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Wanting to set up a charitable foundation
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Having the desire to start a new business
STEP TWO
Align Your Exit Type with the Reason You’re Leaving
STEP THREE
Figure Out Your Number
The ultimate judge of your company’s value is the market itself. No matter how much you want for your company - or what you think you need - if the market says the business is not worth that, then you’re out of luck. In addition to getting a business valuation to understand what your company might be worth to a third party, there is another calculation you should make, which is to understand what your business is worth to you.
When the market valuation and your personal valuation coincide, it may be time to consider an exit.
To answer the question “What is your business worth to you?” it helps to be clear on your motivation for selling. What follows are a few examples, including retiring, being risk averse, and boredom.
STEP FOUR
Decide What Role You Want to Play in Your Company in the Future
STEP FIVE
Pick Your Spot on the Exit Matrix
Your final step to a happy and lucrative business exit is to pick your spot on the Exit Matrix, which corresponds with two factors: 1.How important is it that you maximize the cash proceeds of a sale? 2.How long are you willing to stay on post sale?
At one extreme, you may have built up enough investable assets outside of your business to be financially secure, and you are willing to continue to be a shareholder in your company for the long run. If this is you, then hiring a CEO and relinquishing your day-to-day responsibilities may be your best exit option.
At the other end of the spectrum, you may have another business you want to start immediately and therefore want to maximize your cash proceeds and minimize your time in your company post sale. In this scenario, you would look to sell your business outright to a strategic buyer.
No one point on the Exit Matrix is better or worse than the other. The key to a happy and lucrative exit is to get clear on your priorities before you start the exit process
How It Works
The Company Value Maximisation Plan
1. Schedule a Call
This allows us to understand you, your obstacles & your motivations.
2. Free Company Analysis
We benchmark your company, establish a current estimate of value plus a Value Maximisation Plan to achieve a heightened valuation.
3. Execute The Plan
We assist business owners in the execution of the Value Maximisation Plan using our skillset, strategies & partnership network.