At AcquisitionHub we meet with people every week who are exploring the option of selling their business.
One of the patterns we’ve seen is thinking a sale can happen sooner than is actually possible.
From the 100+ companies we’ve evaluated since July last year, 99 of them would benefit from an exit planning process. Something that needed to be started long before they got in touch with us.
Let me break it down for you.
Starting the planning and preparation process isn’t about listing your business for sale.
Timing your exit is largely outside of your control. You can set an arbitrary timeline for 1,2,3 years out, but it is extremely hard to line all this up with finding the right buyer and have them actually buy your business.
But that does not mean planning should be discarded. On the contrary.
Planning a few years out of your exit target date allows ample time to:
- Have the right conversations with your business partners and family
- De-risk the business so it's attractive to the market
- Engage in deliberate wealth planning ahead, factoring in the sale proceeds both IN or OUT of your overall net wealth
- Hire the right advisor to support you through the planning phase
- Avoid feeling rushed in making a very big financial decision
Below we’ve put together a timeline broken into stages
Exit In Mind
Learning About the M&A Process
Thinking about a Future Sale
3-5 Years Out
Exit Planning
Internal & Personal Conversations
Personal Wealth Planning
Clean Financials
3 Years Out
Exit Preparation
Hire an M&A Advisor
Get a Valuation
Quality of Earnings
15-18 Months Out
Exit Launch
Building a Buyers List
Distributing High Level Information to Buyers
Initial Conversations with Buyers
9-12 Months Out
Executed LOI
Execute an LOI with a Single Buyer
Engage in Due Diligence Process
3-6 Months Out
To help you evaluate your business in the context of selling it, we’ve created some tools for each stage of the business exit timeline. Successful exits involve a staged approach and so we designed these tools to meet Owners where they are on this exit timeline.
With 4 out of every 5 businesses that are listed failing to sell we think preparation is the most important component Owners get right so you can launch your deal with a greater probability of success than 80% of the market.
Is your Business Exit Ready?
Find out in 5 minutes with our Exit Value Scorecard.