Many companies (in fact most companies) don’t have an exit strategy. This is a mistake. It’s important to develop a business exit strategy and to regularly review your progress in addition to understanding what is happening in your market and the current M&A market.
Companies talk annually with their legal, insurance, and financial advisors. M&A Advisors should be added to this list. By establishing a relationship with an M&A advisory firm well in advance of any transaction, you will have the opportunity to build value into your company and avoid the common mistakes companies often make as they grow towards a business exit. As you are determining your next move, it can be helpful to use your Advisor as a sounding board. They will often provide you with insight on how your decisions can affect an eventual sale.
It’s important for shareholders to understand the exit process and what is involved, along with what potential buyers look for, the questions they are likely to ask, and what they are likely to place a premium value on. Preparing your company for an eventual sale well in advance of any transaction will result in a much smoother process and less stress for the shareholders and executive team. Being prepared is especially important when a company is approached out of the blue with a surprise offer.
It may surprise you to learn that we regularly advise many of the firms that contact us NOT to sell after we have had an initial discovery call. Instead, we coach them on what the shareholders and executive team need to address in order to get their company in a better position for an eventual sale. We then arrange to follow up at a predetermined time to see how the firm has progressed. At this time, we might suggest additional areas to focus on and set a new timeline.
Let’s talk about preparing your business exit strategy. Please use our Online Calendar to schedule a call, or call us at 416-483-9400.