Realise your Full Business Value with Exit Planning

As a business owner you’ll reach a point when you wish (or need) to exit your business whether through a sale, a buy-out, or a planned succession. When this time comes the revenue from the transaction needs to match the financial requirements you need for your next venture be it retirement, a sabbatical or another business.

Research1 shows that ‘48% of owner managers who plan to sell their business in the next 5 years had no formal exit strategy’

If you don’t have a plan for maximising your business’ potential sale value, now’s the time to put one in place. It will take time to prepare for a smooth process and rewarding outcome.

Don’t leave it until the last minute

A recent survey2 reports SMEs typically need 3 years to prepare for a sale. From that survey of 610,000 directors, 12% of small business owners are over 70 years old; and 21% are over 65 years old, indicating that many directors may be late in planning their exit.

As previous business owners ourselves we at CMC Partners appreciate that it’s difficult to find the time to think about your exit plan when busy with everyday operations. However, developing an achievable exit strategy is an essential task to which too few owners give proper consideration.

What’s makes a good exit plan?

A good plan will set out steps to increase the value of your business, helping to attract prospective purchasers, and get the best possible price.

Key questions:
• What are your retirement goals, and how much do you need to achieve them?
• When would you like to exit from your business?
• What is your preferred exit route?
• What is your business worth today?
• Have you identified the best ways to increase your business value?
• Do you have a continuity plan to protect your business should you become seriously ill?

Key factors to increasing value in your business

A key element in exit planning is identifying factors that will increase the value of your business. Creating a timeline that plots value improvement strategies allows you to position yourself to exit your business at a time that suits you.

This helps you easily recognise how much your business needs to grow in value to meet your financial target within your timeframe.

Value improvements to consider

1. Good and improving cash flow
2. Potential scalability
3. Dependency on certain customers, employees, or suppliers
4. Recurring and sustainable revenue
5. The size of market share
6. Customer satisfaction
7. The dependency on the business owner

The strength of the above factors will provide a focus on the areas to grow in your business and improve your chances of a successful sale, as well as facilitate planning and preparation for that sale.

CMC Partners – 30 Years’ Experience

CMC Partners specialise in growth & exit strategy development as well as selling businesses. We help owners realise the full potential of their business whilst maximising its sale value. Over the last 30 years, CMC has worked with hundreds of business owners in planning their exit and been involved in many successful sales, totalling £156 million in value to date.

If you would like to arrange a free meeting to discuss your business and your options going forward, contact your local CMC Partner Rupert Beazley based in Wallingford, South Oxfordshire on or call 07880 221818.

1 UBS Wealth Management Report 2018
2 Moore Stephens 2017 Survey of 610,000 UK SME Directors

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