I often encounter owners who are steering their business towards an exit in the next few years…
But not always a successful one.
Either the valuation target won’t be met. Or the timescale will take years longer than anticpiated. Or due diligence process gets messy and falls apart.
Any ONE of these warning signs could mean your exit is not on track…
⚠️ Unresolved Challenges. Issues that you leave for new owners to sort out, will impact your valuation and exit path. Cash flow problems, high debt levels, staffing challenges, sales and marketing constraints, outdated tech… the list goes on.
⚠️ Stagnant Growth. Higher valuations are attracted to solid growth trajectories. If growth plateaus, it’s a clear sign that something needs to change, prior to an exit.
⚠️ Low Resilience. Rapid external changes can create direct and indirect competition overnight. Or introduce additional costs or challenges. Can you demonstrate resilience?
⚠️ Declining Margins. A pattern of shrinking margins might indicate that your business or operating model are no longer as competitive as they once were. Buyers are wary of investing in a downward trend.
⚠️ Insufficient Scale. Even a well-run, profitable business will attract fewer buyers and a lower valuation, without sufficient scale. Are you able to deliver the most effective way to scale up?
⚠️ Unclear Strategy. Be clear on how you’ll maximise the valuation of your business in the shortest timeframe AND find the right buyer. Or partner with people who can make it happen alongside you.