SME BUSINESS TIPS
THE decision to exit a business is one of the biggest and arguably most difficult that SME business owners will face during their business life, having typically lived and breathed the business since it was established.
The majority of business owners will only have one exit event in their business lives, as such it is essential to be well-prepared for an exit process in order to maximise value, ensure the business goes to the right buyer and ultimately to deliver a successful exit.
This week Chris Summerscales, from Seneca Partnerships, gives his tips on planning your business exit. ●● Understand the drivers for exit
Many entrepreneurs and owners have been with their business since they were established, so attracting the maximum capital value is not always the key driver behind an exit.
It is not uncommon for a business owner to want the business to be passed on to the management team or to a buyer or investor that will look after the workforce.
The key drivers are likely to have an impact on who the ultimate buyer of the business is. ●● Financial reporting
During the sale process – which can last upwards of six months, if not much longer – you will need to ensure that key indicators of the business remain attractive to buyers.
So firstly, do focus on keeping sales, profits and margins in line with expectations and forecast growth. There is no substitute for having robust financial information.