For SME business owners who are thinking of selling their business in the future…
.. the message is simple: it’s never to soon to think about the exit.
Here are a few things which I’ve heard countless times from others who have been through the exit process… stuff they wish they’d thought more about, prior to the exit:
> LIFE BEYOND THE EXIT. Entrepreneurs never really retire, but they do need a clear plan for the next chapter of their life. It’s completely normal to fear some level of loss and uncertainty. But beyond an extended holiday or ‘more time with the family’, a successful exit requires advance thinking about what comes next: another venture, a new challenge, a project, consultancy, a non-exec role – or whatever.
> TIMING IS KEY. You can’t time the market, but many owners wish they hadn’t left it so late to get the ball rolling. A successful exit can take several years to plan and execute.
> EMOTIONAL ATTACHMENT. Harder for owners who can’t distinguish between business ownership and their overall identity and purpose – but it’s essential to separate the two, for making rational decisions during the exit process.
> TAX EFFICIENCY. Maximising your tax efficiency upon a successful exit doesn’t just depend on getting the right advice; it also mean having enough time to plan accordingly, sometimes several years before the exit.
> GETTING THE RIGHT SUPPORT. Optimising the saleability of your business and significantly increasing the valuation are both possible. You can decide to bring in outside expertise to guide you through to a successful exit. However, that normally means giving business brokers a wide berth.
> COMMUNICATION. Even low key communication needs to be handled carefully and figured out well in advance, to avoid negative consequences, such as loss of talent, customers or suppliers.
> SMOOTH TRANSITION. This is more about designing the kind of transition you want and the overall succession plan you want. So give yourself enough time to have an input into your legacy and the type of buyer (or ownership structure) that aligns with the business you spent years building.