A Good Exit Strategy Maximises A Strong Position
A good exit strategy makes the most of a strong position – it shouldn’t be a way out of a weak position. You want the best outcome from the time, money and expertise invested in the business – why wouldn’t you? So the way you grow your business should be aligned with your exit strategy.
When? How? Who? Trade Sale? Family Members? Outside Investor? Management Team? IPO?
There are many variations but the principles of thorough preparation, correct route choice and the right timing apply to all.
Keep the business in shape, with good contracts, a strong brand, excellent records and a committed workforce, not to mention consistent profitability. Know the potential counter-parties and aim to make your business attractive to them. Look at your business from a buyer’s perspective and exploit synergy.
Choose it to fit your aims. For example, if you want cash and to leave the business, it may be a sale. If you want to realise some cash and stay on, while moving the business to the next level, it may be private equity. Or perhaps, you have a legacy you wish to preserve. Having good financials and prospects will create value, but there can be further value if a transaction is timed to coincide with the right economic conditions. Don’t start planning too late: plan in good time, for the right moment.
Of course, with exits, like many things in commerce, the devil will be in the detail. Whenever you start working with us, for long term growth or for an exit itself, we’ll have your chosen exit in mind so what you do now maximises what you receive.