AccountingBusiness Planning

8 Steps to Prepare for a Business Exit

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Every company owner has a dream that one day their business will be bought for many millions.   There are two types of owners:
  • Those that keep dreaming; or
  • Those that influence and encourage their dreams to become a reality.
Knowing what you want and being realistic with time horizons is key to planning for an exit. Below are the key steps to making the dream a reality:
  1. Agree with your family what you want to achieve. Write it down.
  2. Agree with your business partners what you want to achieve. Write it down.
  3. Assess what bigger and better firms in your sector are achieving. Write it down.
  4. Knowing what bigger and better firms are achieving start to break down your business into functions, departments, processes, regulation, product / service, resources, skills, scale, complexity, disputes, IP protection and performance. Critically assess what you are doing well and what can be improved.
  5. Assess if the professionals, consultants and advisers that surround you are capable of supporting this phase.
  6. Assess your personal tax position now. Be sure that you know how to structure a potential exit that gives you maximum return, from a tax position.
  7. Set specific goals for yourself and the team to improve those areas that need to be improved. Measure and monitor these areas.
  8. Assess what a likely exit would look like. A trade sale, MBO/ MBI, private equity, and IPO etc.
If you are unsure how to organise and structure the above yourself, then use a professional.  Usually a good commercially minded accountant can walk you through these steps. Personally I like to control all of this in one big excel chart, that is referred to at all management meetings.  From experience, by concentrating on this from the outset allows the business to professionalise itself to such an extent that not only will it act as a tool to get you to the exit fully prepared; but you will also be improving the performance of the business as you progress through this journey. Wisteria has helped over 30 companies successfully exit in various forms over the last 5 years.   If you have any questions or queries please call us on 020 8429 9245 or email us at [email protected].

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