Planning to Exit
Once you have identified your personal objectives and the likely timeframe for an exit, you should also think about the external factors that will influence your strategy.
External factors that could impact the business positively or negatively and ultimately increase or decrease your business’ value are:
· The current marketplace in which your business operates
· Where your products and services are in their life cycle
· Upcoming legislative changes
· Technological developments in your industry.
Key internal influences that should be considered include:
· Can the existing management team operate the business without you?
· Can the existing company resources meet future growth?
· Is accurate performance data available through the current operational controls and financial reporting systems?
Once you have completed the assessment you should be in a position to decide on the most appropriate exit strategy. Try to always remain open to all possibilities throughout the exit process as situations can quickly change.
The following exit planning options are available:
· Trade sale;
· Keeping it in the family;
· MBOs, MBIs and BIMBOs;
· Winding up; and
· Innovative solutions.
It’s always a good idea to document an exit plan to be able to revisit it on a regular basis as things change.
Be prepared to take decisive action quickly. For example, if signs are indicating that the market is going flat, an early exit may be appropriate.
Statistics have shown that the best time to sell your business is when it is still on its way up. This leaves the new owner with good growth prospects.