If you are planning to sell your business, due to retirement or some other reason, it is important to plan this process well in advance.
In fact, an Exit Strategy should be developed 3 to 5 years prior to your planned sell date.
Exit Strategy – Get your business fit for sale
As part of the exit strategy, there are important areas in your business you need to develop in advance of any sale/disposal to ensure you get the maximum value.
For example; developing or expanding your management team, broadening you customer base or product lines, renewing contracts due to expire, etc. Similarly, dropping any loss-making product lines or low profitable contracts will enhance the value of your business in the long run.
Exit Strategy – Targeting you potential Buyer
Who might be interested, and what approach will get you the best price? You should think quite early about the likely profile of the kind of buyer who might be interested in your business.
Purchasers it is worthwhile considering:
It may well be in your best interest to pursue more than one of the above.
The approach you take towards identifying potential buyers is critical. For instance, contacting a competitor openly may well negate the potential premium he might be prepared to pay, whereas a discreet approach from a third party (such as an adviser) could open the doors for discussion. In other cases, an informal chat over a coffee might well be the best approach to solicit interest.
Whoever the purchaser might be, they will require financial information. The amount and complexity of the information required will depend on the value of the sale.
Contact Dylan Byrne Director OSK for assistance in developing an exit strategy for your business or in relation to our tax and accounting services.
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