Business succession examines the most appropriate future strategies for the existing business that satisfies all the requirements of the present owners. This involves a review of:
The likely buyers – existing team/management, family or external buyer?
How is the sale to proceed – sale of business, sale of structure, gradual transfer of interests?
Timeframe – when is the sale/transfer to occur?
What can be done to enhance the value of the business?
What planning has been/can be done?
This last point leads to planning the exit strategy.
Planning the exit
Planning the exit is essential to achieve the maximum value for the business. There are 10 steps that can be used to maximise the value of a business:
- Profit improvement
- Growth plan
- Lock in revenue (contracts)
- Lock in management (no reliance on founder)
- Reduce debt (clean up balance sheet)
- Find a buyer who "needs" the business
- Negotiate well
- Anticipate all objections and value reducing tactics
- Manage all the risk.
If these 10 steps are rigorously implemented over a period of two to four years the probability of getting a high price for the business is maximised. Don't leave the opportunity to make these critical changes too late – ask for assistance. Contact the team at Charts to start the conversation around succession.