Top 10 Tips for an Exit-Ready Business: Part 1

Author: Vasu Majumdar

BAND’s Senior Advisor in Corporate Finance, Vasu Majumdar, shares essential advice for agency owners planning to sell. Leveraging his extensive experience in corporate finance and the creative industries, Vasu highlights the importance of early and strategic planning for a successful exit. Here’s what you need to know:

1. Assemble a Trusted Advisory Team:

Don’t Go Solo: Like a professional sports team, your business needs a group of experts united towards a common goal. For a successful exit, this means forming a team that includes M&A Corporate Finance, Legal and a Business Mentor.
Understand the Buyer’s Perspective: Often, potential buyers need a deeper understanding of your business. Preparing for sale ensures you present your business attractively and accurately, safeguarding its value throughout the process.
Manage Costs Effectively: Keeping advisory fees within 5-7% of the deal value is a solid benchmark. Structure these fees around milestones to incentivise your team throughout the 18-24-month journey.

2. Lead by Example:

Stay Motivated: Your involvement doesn’t end with hiring advisors. Stay engaged and lead by example in implementing their strategies.
Be the Driving Force: Your proactive approach to recommendations shows commitment and drives the process effectively towards your goals.

3. Employ SMART Objectives:

Define Clear Goals: Use Specific, Measurable, Achievable, Realistic targets to set a clear framework for the sale.
Adherence to Timelines: Commit to your timeframe, adjusting as necessary based on market conditions and the deal-making environment.
Incentivise with Clarity: When setting objectives for your advisory team, consider deal value, structure, timing, and other relevant parameters to align everyone’s efforts.

4. Identify Top 5 Strategic Buyers:

Targeted Approach: Determine who would be most interested in acquiring your business. This foresight is vital for a successful M&A process.
Stay Updated: Your M&A Advisor should monitor these top buyers, understanding their interests and sensitively gauging their appetite for a deal.

5. Quarterly Financial Health Checks:

Regular Reviews: Implement a tailored ‘Critical Check List’ and review it quarterly to track progress.
Comprehensive Coverage: Ensure your checklist covers strategic, commercial, financial, operational, and other critical areas. A well-managed and organised business can become exit-ready within 12-18 months.

These tips form the foundation of a solid exit strategy, crucial for maximising your business’s potential sale value. Part 2 coming soon, where we’ll explore more advanced strategies to enhance your exit readiness.