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.
- 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.
- 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.
- 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.
- 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.
- 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.