You are focused on building your business and bringing it to an end
Why should you think about how you will exit from your business…
When we begin a business very few of us imagine what the end of that business will look like. And while conditions can change, there are a number of good reasons to adopt this practice of projecting the future.
Another reason to plan:
We should plan for our future, but in reality our futures aren’t always predictable. An unexpected health challenge or accident can disrupt the very best of plans.
A real case: I was diagnosed with 2 different kinds of cancer just 5 months after buying my business. I am grateful for the critical illness insurance that allowed me to hire and keep my business going until I recovered. That was over 10 years ago – but I won’t forget what could have happened.
How Would You Get Started?
Let’s look at an overview of the process:
There are 5 stages of the preparation and sales process:
1. Preparation
Make your business more attractive to future buyers
2. Marketing
- Prepare a preliminary marketing document of 1-5 pages to highlight the advantages of your business
- Determine your preferred approach to selling?: From do-it-yourself and self-serve options to using a variety of agents
- Before holding negotiations, protect your privacy by having both parties sign a Non-Disclosure Agreement (or NDA). Know what that does
3. Serious Interest
CIM is created from your initial marketing document to be the basis of a serious discussion.
- The formal valuation of the business is done at this point by an accredited valuator or accountant who is specialized in this area.
- One consideration is how you will sell your business: on the basis of shares – or assets, as an example (and consideration should be given at this point to the taxes that may be due at the time of sale) ** – I would have a preliminary discussion with an accountant – clean up any vulnerability – situation – incorporation?
- If the buyer is interested – a non-binding offer can be given (this signals they are serious – and is the basis of a negotiation)
4. Data Room
(NDA signed, books are clean: 3 years is the amount of standard accounting information to supply).
5. Agreement
Once the seller and buyer are in agreement, contracts are drawn up and signed (the terms of the contract need to be established.)
There are several reasons that we have created an exit training for entrepreneurs that will:
When we begin a business very few of us imagine what the end of that business will look like. And while conditions can change, there are a number of good reasons to adopt this practice of projecting the future.
Preparation for your exit can take from 3-5 years depending on your business
And it all takes place while you continue to run your business.
That is why we have designed Exit training to satisfy the needs of entrepreneurs who want to pass along their legacy to another entrepreneur (whether a family member, an employee, another entrepreneur or a corporation) and receive compensation for the sale.
The most significant part of preparing to exit is understanding the process that successful businesses follow to exit. That is where we start: with a training program that takes you through all 5 stages of the exit process, to understand how the process works and to help you prepare you and your business for opportunities.
Part of that training is avoiding common mistakes, as they think about the how they will close out their businesses, such as:
- Assuming that the preparation process takes months versus years. The impact? Receiving less value.
- Not improving the efficiency of your operation, in at least 5 ways:
- over-dependence on manual approaches;
- lack of automations to simplify and enhance communication;
- dependencies on either suppliers or customers;
- not being aware of important risk factors;
- not knowing what sets you apart from competitors (that is important for creating value),
We help them avoid those mistakes through initial training – then follow up consultations throughout the exit process.
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“Testimonials, as authentic endorsements from satisfied customers, serve as potent social proof, significantly inspiring trust in potential consumers.”
“Testimonials, as authentic endorsements from satisfied customers, serve as potent social proof, significantly inspiring trust in potential consumers.”
