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Understand the plethora of exit options available—and work with us pre-transaction to increase your valuation at time of exit.
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When we refer to exit planning, we're referring to working with a seller pre-transaction in order to maximize the value they get in the future, when they decide to exit.
There are a wide variety of options available to owners that are considering an exit. Practical exit strategy normally begins by speaking with a qualified advisor that is able to explain these options as well as the pros and cons of choosing one versus the other.
At a high level, business owners will commonly have these options to consider:
In addition to these options, there are lots of opportunities to get creative—and in order to accommodate special circumstances like bankruptcy. Private company owners have a lot of options and considerable freedom to pursue many different types of exit strategies.
However, it takes time to plan a successful transaction and owners will see measurable gains by planning for an exit in advance of trying to do a deal.
As an owner, once an exit strategy has been decided upon, usually the next logical step is to move into a stage where they work with an advisor to improve the marketability of the business.
Exit planning services are aimed at maximizing the value a business will command in the real world of mergers and acquisitions before it is presented to prospective buyers. M&A advisors are able to leverage their experience in M&A and their relationships with prospective buyers to advise business owners on the qualities and traits that buyers pay the highest premium to acquire.
Exit planning normally begins with a market-based valuation. M&A advisors (investment bankers) are normally the most qualified to conduct this valuation because it is their business to foster relationships with high-quality active buyers.
The feedback that they get from active buyers can usually be turned into a roadmap for driving the sale price up. This works so well because it gives owners the ability to build in the traits that buyers want to see in a business before they bring the business to market..
Buyers look for certain things and prefer to pay more for high-quality businesses, than to buy poorly-run companies.
In addition to the obvious benefits of the value enhancement work that ultimately drives the sale price up, owners see many additional benefits to exit planning.
Exit Planning gives owners the time they need in advance of a sale to put together the team of professionals that will help them to not only exit the company, but to plan for this transition in their life.
Selling a company is a big event. It takes time and owners will want the peace of mind that reassures them that they are making the right decision.
With a proper exit plan in place, owners will be reassured that they are making a deal they want to make, and that they will be able to enjoy life post-transaction.
If you're considering hiring an M&A advisor, we recommend that you schedule an introduction call with us. This call will give us the opportunity to learn more about the type of transaction you're considering—and it will give you the ability to get your questions answered.
Additionally, if you're a business owner, we have some excellent free resources that are aimed at educating first time seller.
