If you’re selling to another buyer, then can you work something into a contract that ensures your most loyal employees still have a job?If you’re merging with another company, how can you make sure that the mergers you choose are moving your team towards the goals they wanted to achieve when they first joined your business?
As with any business goal, owners need to define their goals before they can determine the best strategy.
Once goals are clearly defined, business owners and supporting players can work together to develop a strategy that will reach the desired goals and position the company for future growth. To secure the best price and/or deal terms for a company, the exit strategy should include tactics that optimize company value.
Supporting players include company leadership, key employees, M&A advisors and other legal and financial experts. These tactics should include working with M&A advisors who understand your industry and are familiar with the investors and buyers who are active in your industry.
They should also be knowledgeable in the prevailing valuation metrics for the industry.
Are you happy to stay on and help the company continue to thrive after you’re no longer leading the way?
Or do you want to cut ties entirely with a significant cash settlement?
An exit plan is where you can detail all of the different things you’ll need to think about before you leave your business, including valuations, and legal contracts.
When constructing your exit plan, think about how you want this business to help you fund your retirement.
When you start your business for the first time, your goal will probably be to start making money as quickly as possible.
As you start to see some success from your strategy, you’ll begin to look into other things, like growing your company, developing into new markets, and make sure that your books stay “in the black” so to speak.