Getting into a deal to buy a business is relatively easy.
The skill lies in knowing how – and when – to exit successfully.
With one in 136 companies currently going into liquidation, insolvency practitioners and receivers are not short of businesses to sell. Invariably there are some very tempting offers on the table for owners who have the finances lined up.
As a What If Specialist and Master Strategist who helps business leaders and heads of family owned firms to get the most out of their companies through challenging their thinking, the issue of exiting is a hot topic which members of my
What If? Forums bring to the table.
One member was recently approached about buying a competitor business that had got into financial difficulty. Running a ruler over the numbers showed that there was a deal to be done as there were clear synergistic benefits.
“What’s your exit route?” was the immediate question fellow members asked this particular member. This critical question led to a good deal of soul searching including a review of the objectives and success criteria of the deal.
Once the member clarified this in his own mind the nature of the deal and the finances changed – because he had come up with a workable solution which led to a much improved offer.
It’s now down to the receiver to get a higher bid – which is fine if they are successful. If not, then our member knows exactly how he is going to make a 33% per annum return on his investment – and who the target purchaser is going to be.
The key lessons from this experience is to think things all the way through and write down on a piece of paper how you are going to exit and who is going to achieve the goal for you.
If you want to know more about how to start with the end in mind and how to plan your exit route then contact me at email@example.com, go to@richardwhatif on Twitter Link, Richard Bosworth on LinkedIn or www.whatifforums.com