For many people, exiting their business (whether by sale or handover to a successor) isn’t something they think about until the time comes. And of course, without prior planning, conditions might not be in your favour when that time is eventually right.
Thinking about and planning for your exit doesn’t mean you are throwing in the towel, or that you’re somehow being disloyal to your colleagues and staff. In fact, it’s quite the opposite.
Planning for an exit means you’re securing the future of your business long after you’ve moved on, stepped aside, or begun a new chapter…
Preparing your exit strategy early is the key to a successful outcome for both you and your business.
So here are 5 steps you can take to prepare for it:
Don’t underestimate the time it takes to get everything in order for a successful exit. You can’t wait until you want to sell or leave the business to start the process, you need to plan for your desired exit at least a year or two beforehand.
Identifying your desired exit strategy also means you’ll be able to structure your business and finances to achieve that outcome, so allow enough time to map that out.
Whether you intend to sell the business or hand it over to a successor you’ll probably have to restructure your org chart and processes to allow you to step aside when the time comes. If your business is completely reliant on you today, then without changes you won’t be able to walk away from it later.
So, it’s important to structure your business with your exit in mind.
3. Brand and Marketing
If you want to sell your business for the best price possible then it should look as attractive as possible to a potential buyer. Invest time and money early on to ensure you have a strong brand and make sure you support this through a well-structured digital marketing strategy.
Remember, it takes time to create the desired impact, so you should start this as early as possible.
4. Keep your foot on the peddle
While you’re re-structuring your business for an exit, don’t forget to keep the revenue flowing and new contracts signed. It’s important to focus on gaining good recurring revenue that you can show is scalable. A potential buyer will want to know that your business still has room to grow after the acquisition, so focus on building a strong loyal customer base.
5. Create a data room
Get solid advice about this bit. This refers to the creation of digital folders where you store documents relating to your legal structure, shareholding and shareholder agreement, financial accounts, management accounts, client contracts, staff contracts etc.
A potential buyer will want to conduct due diligence on your business, so having all this information ready and accessible will not only save time but will also present your business in a professional light.
In summary, you need to start thinking and planning for your desired exit as early as possible.
There are many things to think about, so if you’re not sure where to start then seek professional advice and support.
If you’re unsure as to your exit plan, then why not contact us at Yellowyoyo to discuss your next move? We’d love to chat with you.