Top 10 Tips for an Exit-Ready Business: Part 2

7 December 2023 | 5 min read

Author: Vasu Majumdar, Senior Advisor Corporate Finance, Creative Industries

 

Following on the first five tips from Vasu Majumdar, Senior Advisor in Corporate Finance for Creative Industries at BAND, here are five concluding tips to make sure your business is exit-ready.

 

  1. Update Legal Contracts:
  • Regularly Revisit: Ensure your contracts are current, particularly change-in-control provisions.
  • Identify Issues: Work with advisors to spot and address contentious areas before sale discussions begin.
  • Avoid Onerous Terms: Be cautious of conditions that might complicate ownership changes.

 

  1. Incentivise Your Management:
  • Focus on Succession: If you’re a significant shareholder, the buyer will assess the quality of your management team.
  • Plan Thoughtfully: Consider EMI option pools or EOTs to smoothly transition leadership without overtly signalling a sale.
  • Lead the Change: A well-incentivised team can significantly enhance the value of your business during a sale.

 

  1. Maintain Momentum:
  • Expect an Emotional Journey: Selling can be challenging, but momentum control is in your hands.
  • Readiness is Key: Exit readiness means preparing for potential offers, not just starting the sale process.
  • Stay Engaged: Keep your focus and avoid disinterest, which can stall or derail the exit process.

 

  1. Strategic Tax Planning:
  • Be Proactive: Good tax planning is crucial and should be a part of your sale strategy.
  • Minimise Liabilities: A clean acquisition without tax complications is more attractive to buyers.
  • Plan for Post-Sale: Consider the impact of taxes on your cash proceeds to prevent value loss.

 

  1. Master Working Capital:
  • Balance the Books: Effective working capital management is essential for a smooth transition.
  • Leave Adequate Cash: Ensure the business has enough to operate post-sale.
  • Control Transactions: How you manage payments can influence the final sale value.

 

With these and Vasu’s first 5 tips, you can strategically position your business for a successful exit.

 

Ready to begin your exit journey? Contact us at BAND for specialist advice and support.

 

Let’s Talk

 

Tel: 020 8138 5560

Email: hello@weareband.co.uk

111 Charterhouse Street,
London, EC1M 6AW

 

Julian Davies

Julian Davies

Managing Partner at Redfin

Managing partner and Chartered Accountant with 30+ years of experience in marketing, media, and creative industries. He leads the Redfin team, offering expert advice on growth and profitability. Former owner manager of an agency acquired by a listed group; his industry insights are second to none. Off duty, you might find him on the golf or tennis court, determined to master new tricks.
Shelley Watkin

Shelley Watkin

Client Finance Director at Redfin

A qualified Chartered Accountant with 20+ years of experience in the marketing services sector. During her 5+ years at Redfin, she served as Client Finance Director offering invaluable insights into strategic and commercial matters. Shelley has also assumed the role of Finance Director for various creative agencies, guiding them through successful sales processes. If she gets free time after managing her children’s busy schedules, she likes to chill out doing yoga and gardening.