Exit Strategy Techniques
When preparing to exit your business one must consider all options, resources and time horizons necessary to reach the desired outcome. OPUS Consulting Group specializes in Exit Strategy Planning and will create a road-map that defines the best option for you to successfully exit. In a recent Blog from last October we described the most general Exit Strategies. and we would like to build on that and describe some techniques to those strategies.
If your prize point for an outside buyer is too high, then look for ways to offset for a lower sales prize. One such option is to stay on as an adviser and collect a salary. Having access to the former owner is extremely valuable and spices up the deal. Another option is for property owners to keep the building in their private portfolio and look to negotiate a long term lease and collect rent.
As always creating buzz about your business and attracting a variety of sellers is an effective way to increase the prize and give you more negotiating power. This starts by setting a realistic prize, having well defined processes and procedures in place and having your financial house in order are all necessary to attract realistic buyers.
Having a backup plan to sell to employees either as a management buyout or through an ESOP are ways to avoid an outside buyer. Some restrictions apply to ESOP’s and the exit is more gradual. Grooming the staff and management are essential to ensure business continuity and a successful business exit. Ask yourself if you have an heir, someone in your family that can take over the business once you are ready to leave. It might be possible to step down and serve in an advisory capacity.
Postpone Your Exit
Finally, we recommend staying on and increasing your savings. Start by thinking about how big your role is in your own company. Try to remove yourself from day to day operations and delegate your tasks. Having a well defined goal and the right Exit Strategy Consultant will help bring your business to the next level making it an attractive buy. This process can take a few years so we recommend starting today.
In each of these situations, the business will need to improve its value and its management. Opus assists prior to making a decision on which strategy to adopt and how to implement it. Opus Consulting Group will orchestrate the team that will implement the strategy, improve performance and maximize your desired outcome.