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What is Your Business End Game
An exit strategy is a plan for wrapping up your involvement in a business. For most people, that means readying the business for a change of owner. Executing a well-thought-out sale ready strategy will increase your sale price.
Outright Sale (walk in / walk out)
Generational change (family succession)
Placing the business under management
Vendor Finance (earn your way of the business)
What Levers do I pull to Increase my Company Value?
A valuable business is also a sought-after asset, making it more likely that you get an offer to buy your business in a shorter timeframe. This gives you a greater negotiating position when you do eventually decide to sell.
The first step in getting your business “sale ready” is to use the various tools that can help you understand the current market value of your business and its strengths and weaknesses through the eyes of a buyer. This kind of analysis will help you to identify the perfect buyer profile – that is, the buyer most likely to offer the highest sale price and attractive terms and conditions of sale. Always be objective and conservative when deciding if your business is ready for sale, as many strengths of a business can be enhanced, and weaknesses mitigated, by working through our key drivers and risk mitigation analysis and creating an action plan for implementation.
Collaborating with a trusted business adviser will also help. ROIC Business Group will be able to drill down on many of these issues and provide you with perspective and local market intelligence.
If your business is not ready for sale when opportunities arise, you will miss out on significant potential benefits and a lower than ideal purchase price.
At ROIC Business Group we always advise our clients to begin preparing for the sale of their businesses well in advance of when they want or need to put them on the market. The additional time will allow them to evaluate and fix any weaknesses their companies have, so they will be as attractive to prospective buyers as possible and will generate good offers. How long this preparation process will take varies from company to company.
The 8 key drivers of business value
Financial Performance
Your history of producing revenue and profit & record-keeping.
Growth Potential
Your likelihood to grow your business in the future and at what rate.
Switzerland Structure
How dependent are you on any one employee, client, or supplier.
Valuation See-Saw
Whether your business is a cash suck, or a cash spigot will affect overall cash flow.
Recurring Revenue
The proportion and quality of automatic, annuity-based revenue.
Monopoly Control
How well differentiated is your business is from the competitors.
Client Satisfaction
The likelihood that your clients will remain with you and also refer you.
Hub & Spoke
How would your business perform if you were unexpectedly absent.
Let's start a Conversation about Your End Game
It can be tempting to try to time the sale of your business to coincide with a peak of the economy. However, unless you have a crystal ball, it's impossible to know when that moment will hit.
Worse, you'll need to do something with the money you accumulate, which means buying into an asset class which is being propped up by the same economic conditions you're selling out of.
Instead of trying to time the market, look inward and consider selling when the time is right for you and your business. Know that no matter what the economy is doing at the time of your sale, you'll have the opportunity to invest in the same market.
Your health, energy, dreams and financial position are the most important things to consider when you design your end game.
Whether you are looking to exit tomorrow or years down the road, use this exit checklist to get started.
Interested in finding out more?
Why not book a 30-minute phone call to find out if the value builder system can help with achieving the Freedom you have been looking for..
Tools and Insightful content for business owners who would like to focus more on how to protect, grow and build value in their business.