Exit Readiness Strategy. So, You’ve Decided to Make Your Business Exit Ready!
Congratulations. Most business owners find it hard to believe that they should start thinking about the sale of their business from the first day they acquire or start their business – but they should! We highly recommended you plan your exit early in the start-up process; the sooner the better.
That doesn’t mean you will go ahead in the near future, but you need to be prepared – just in case. You never know what the future holds, and if something happens, and you are no longer able to operate your business, or you get an offer you can’t refuse, you need to be ready to sell it to maximise the sales value.
Even experienced business owners get completely absorbed by the day-to-day operations of their business and tend to forget that one of the most important parts of owning a business is to plan and prepare for their exit in advance.
By doing that you have time on your side to maximise the value of your business for sale. Once your timeline is set, you can then set measurable targets to achieve a sale at the full potential market value of your business.
How, and when your business is sold, and how much money you receive from the sale depends on many factors. Some within your control and others you are unable to control, but you will need to have a contingency plan to deal with should they arise.
But don’t be too concerned if you have been in business for a while and don’t have all of those important things in place.
The good news is that our Exit Readiness Program has been designed to enable you to either:
- Start preparing your business for sale well in advance. In a perfect world that would be 2 or 3 years before you plan to sell it. Not only because preparing it thoroughly involves a lot of research and work and will take time, but also, because those same things are exactly what you ideally should have done when you launched or purchased your business in the first place and kept up to date on an ongoing basis, or
- Should it be necessary, you can fast-track all the action steps and processes you will need to put in place to be ready to sell your business in a shorter timescale. Exactly how long that would be will depend on a number of factors, including the size and complexity of your business, the current status of your business, it’s financial performance, systems and processes, the quality of your people, whether you choose to use external advisors, and on you commitment to do what it takes to make it happen.
The latter may be required if, for instance, you have been approached by a strategic buyer and offered a price you can’t refuse, or if you have already initiated the sale process without preparing fully.
Either way, this program will give you the tools and a step by step action plan, and you will have your mentor or coach to take you through the 9 chapters of the program and if required, they will be available to assist or advise you on other aspects of your preparation at any stage of the sale process.
If you already believe that the Exit Readiness Program might be right for you, you can book a Free 15 minute strategy call with me personally, so we can discuss whether it is a good fit for you and your business at this time.
Preparing Your Business For Exit. Is Your Business Ready To Sell?
You’d never hail a taxi if you didn’t know where you wanted to go. Similarly, you should never launch a business without having a plan to one day exit it.
So, what’s your end goal for your business? Because remember, there is no safety net if things go wrong, and there is no redundancy pay-out if it doesn’t work out.
As I explained above, Ideally, you should start preparing your business for sale 2 or 3 years before you plan to sell it.
This includes, ensuring that your business had been set up correctly, that your assets had been adequately protected, that you have a well thought-out product and pricing strategy in place, that you have a thorough grasp of your financial results (or a team member or advisor that does) and ideally, that you have prepared and maintained an up-to-date Long Term Business Plan, for 3 to 5 years, to build and grow your business.
The good news is that this Exit Readiness Program has been designed to enable you to fast-track all of the action steps and processes you will need to put in place to be ready to sell your business.
Of course ultimately, how quickly you get all the elements in place will be entirely in your hands. With this program and an experienced Coach or Mentor available to take you and your team through it step by step, and even work with you as an advisor if you choose, you have all the tools and advice you need to be exit ready quickly.
All you need to do is to take the actions required as laid out in this document in a timely manner.
It is also important to bear in mind that on average in Australia it takes six to nine months to sell a business, but it can take even longer!
Why does it take so long, and what you can do to sell your business as quickly as possible for the price you want?
The time it takes to sell a business is impacted by events on both the seller and buyer side. There are many factors including the size and complexity of your business, the current status of your business, it’s recent financial performance, systems and processes, the quality of your people, whether you choose to use external advisors, and on you deciding to do whatever it takes to make it happen.
Finally, emotional and psychological factors can also play a part, such as the sense of scarcity, to the presence of rival bidders, and the sense of urgency in a seller’s behaviour.
The Business Exit Readiness Program covers all of the above and much more.
But, of course, you also have a business to run, so you will need to allocate, or hire the resources, skills and expertise you will need to fast track the process if your intention is to start the sale process in the coming months.
Taking the above actions and in the rest of this program, with the guidance of your Coach or Mentor, will maximise the value of your business and make it more attractive to potential buyers and investors, as they will see that you have a professional well-structured business and a clear, well defined and professional plan of how you are going to achieve your business financial projections for the next 3-5 years.
This will also be required to enable you to fund your growth should you require additional facilities to achieve the results projected in your business plan and to achieve the valuation you want to achieve when you exit your business.
So, it needs to be attractive, and ambitious, but also realistic. You can be certain that all potential stakeholders and their teams will analyse and challenge it. So, you, your top management team or your advisors need to be able to confidentally explain and justify it to them.
The 9 Chapters of this “Readiness Consulting Program” will cover all the action steps to make sure your business is fully optimised and ready for sale, including how to prepare your 3-5 year Business Plan. We will also provide templates to create your plan and excel spreadsheet templates for your financials.
The First Step in Growing your business requires you to create your Business Plan for the next 3-5 years.
Having a current business plan is one of the most crucial action steps in your exit strategy regardless of whether you are a new start-up, still in the early growth stage or already a mature business.
However, if you don’t have a current Business Plan in place, to complete this Exit Strategy Program, you will need to create a high-level plan up to your proposed exit date. Your coach will work with you to do this.
So, for example, if you plan to exit your business in 5 years-time, your 3-5 year Business Plan must be congruent with your Exit-Strategy from your business. I.e. the financials you prepare for years 1, 2 and 3 of your plan must make sense when compared with your desired value when you exit your business in year 5.
The remaining chapters of this program provide you with the knowledge you need to prepare a well- structured professional business plan, including your projected financial plan and statements.
Chapter 3 Asset Protection, is about using business practices and structures to create barriers between your assets and the risks faced by your business, or even by yourself and your team personally, protecting your IP and ensuring you have all important agreements set up by your legal advisors
Chapter 4 is about your products, and pricing strategy to attract your ideal customers and optimise your pricing and profitability.
In Chapters 5 to 7 we will cover:
“Taking Care of Your People”- your biggest asset, “Funding” your growth, and optimising your “Financial Management and Reporting” systems and processes.
Those are the 3 remaining elements required to create your business-plan. We recommend that you read through those chapters before starting your in-depth Business Plan preparation.
Your Business Plan Must Be Congruent with Your Desired Exit Valuation
In Chapter 8 Growth-Your 3 Year Business Plan, we explain the 7-step process to create your “business plan” and that you need to develop your business plan growth strategy with your “Exit Plan” in mind.
In this chapter of the Exit Readiness Program we explain exactly what you need to do and show you how to do it, and your mentor or coach will be available if required, to assist or advise you on other aspects of your preparation at any stage of the sale process.
If you believe that the Exit Readiness Program might be right for you, you can book a Free 20-30 minute strategy call with me personally, so we can discuss whether it is a good fit for you and your business at this time.
You will receive an email confirmation and a reminder from my booking system prior to the meeting.
Or just send me a text message with a brief explanation of what you need help with, and I will call you back for an initial chat within 24 hours. My mobile number is 0418 277 137