Your Business is Growing – Why is Exit Strategy Planning Critical?

You own and run a growing business.

You enjoy the independence and life style of a business owner, at least most of the time.

If you’re currently considering, or have ever considered the possibility of a strategy to exit from your business, there are several key factors to consider.

First: exiting a business is a long-term project.

If you decide to sell, it could take five years to get the company to a level of performance that will get you the price that you are likely to think the company is worth. You must consider the views of your investors if you have them. You will need to consider the strength of your market position and your management team.  There will be tax and estate planning issues. A sale of the company will probably involve bringing a team of outside professionals to work on the transaction, so that you can continue to run the business successfully and avoid a last minute dip in performance that can be fatal to a successful transaction.

Also consider: an exit from your business is not an “either/or” proposition. There are scenarios that could enable you to take some money off the table via a recapitalization or sale of a minority interest—while you stay active in the business and even retain control. An earn-out involving deferred or staged payments from a “benevolent” acquirer can be a compelling option.

The most compelling consideration, however, might be the current window for founders of growing companies to sell their businesses.  Private equity investors are paying higher prices due to the lack of appealing deals and the amount of private equity funding available.  This creates opportunities for sellers to achieve significant multiples and value.

There will be some unexpected twists in the road leading to the day you close a transaction. But the journey may well be worth it, if it leads to enjoying the fruits of your labor and exploring new directions in your life.

Learn more about executing an Exit Strategy for your business

If you want to learn more about how to create and execute a strategy to exit from your business within the “window” or in the foreseeable future, register below for our free webinar, Exit Planning—The Time Is Now,on Wednesday November 13^th at 1 PM Eastern. It will feature practical, thought-provoking ideas to inform your business thinking.

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