Effective Exit Planning
Whether you are considering retirement, looking for the next challenge, or for any number of other reasons, the decision to sell your business is one of the most important you’ll make. Maximising the return on your hard work and securing your legacy takes careful planning, and whatever stage of its lifecycle your business ownership is currently at, a focus on your exit plans will add value.
There are many questions you need to consider when thinking about selling your business:
- Who are the potential buyers, what do they want to achieve by buying, and what questions will they ask that we need to plan for?
- Are the IT systems in place enhancing or diminishing the value of the business? Are they fit for purpose now and in the future, or are they potentially off-putting for a buyer?
- Is the future story fully understood, clearly articulated, and able to stand up to detailed examination?
- Are the financial and operating KPIs monitored and available over a suitable period of time? Is the track record clear and does it support the forecasts?
- Have you taken advice on the different structural choices available for the sale?
- What business improvements, using the available timeframe, budget, and resources, could lead to a more efficient and controlled sale?
- What, if any, external help is required to prepare for and run a tightly controlled sale process, whilst ensuring minimal disruption to day-to-day operations?
As can be seen from the chart above, the most important factor in a successful exit is establishing a track record for the business that is readily available, easily understood, comparable across periods, and that gives comfort over future performance. Can this be modeled in sufficient detail and does it bridge to the forecasts in a way that is evidenced in times of market uncertainty?
This is where designing and implementing the right systems as early as possible is vital.
Having the correct systems in place along with an up-to-date IT strategy can add value to your business but also reduce risk for potential purchasers.
When considering the attractiveness of your business to potential purchasers it is important to ensure that your IT systems are fit for purpose for both your current business but also aligned to the business strategy, so they are able to support the future business evolution. Modern successful IT systems should:
- Enable operational efficiency;
- Reduce cost;
- Improve customer service;
- Provide real time or near real time information;
- Be flexible and agile to be able to respond to business needs, and;
- Be scalable to enable future growth.
If your IT systems are outdated, not integrated, out of support, or using legacy technology this will often be perceived as a risk and additional future cost to potential purchasers, as they will identify the need to replace these systems.
Therefore, implementing the right systems early and having a forward thinking IT strategy can both benefit your current business and also help maximise value upon exit.
Whatever stage of the exit process you’ve reached, please contact us for further details of our transaction support and IT advisory offerings, and a free no-obligation discussion.