Financial Power Release Exit Strategy Planning Tool

(Newswire.net — January 13, 2015) Reading, Berkshire — It’s a well known fact that more than 70% of privately run businesses never achieve a financial exit. Not only that but in a survey by ROCG, a company that specialises in business exits, 91% of businesses surveyed had no formal plan.

 

To this end Financial Power, an exit strategy consulting firm, have released a step by step business exit strategy checklist to help anyone plan and prepare for a business exit.

 

The checklist consists of 13 individual steps that the Financial Power team use every time they are engaged to aid a client.

 

Here are the highlights…

 

1. SALES VIABILITY ASSESSMENT
   As with any journey, you need to know your starting point and set clear objectives for the exit you want in terms of value, payment terms, timescale and any future involvement in the business. It may be too soon to sell your business. It may even be presently unsellable. Your one-to-one assessment with Financial Power will determine how the land lies.

 

2. INTERNAL COMMUNICATIONS STRATEGY
   It’s unlikely that you will achieve an exit without the buy-in and support of key team members. For a start, selling a business is extremely time consuming. You will need help to manage day-to-day activities as well as to produce all the information that a purchaser will need. Second, the purchaser will want to meet and assess the senior management team.

 

3. FINANCIALS (INC. IT & FINANCE STAFFING RELATIONS) 
   The strength of your business’s finances is normally the most important determinant of its value. The depth and availability of financial information as well as the strength and ability of your finance team to pre-empt and provide fast responses to a purchaser’s detailed requests will add (or if poor detract) significantly from the ultimate exit price achievable.

 

4. ADVISER TEAM 
   Tempting though it will be, choosing your adviser team solely on the basis of cost will usually prove a false economy. More than likely, this will be the only time you will sell a business so you need to surround yourself with professionals who specialise in this field and who have assisted business owners through the exit process many times before.

 

5. DATA ROOM 
   At some point your preferred purchaser will want to conduct Due Diligence and check out your business at a deeper level. Prepare in advance for this by collating important information and documents in a single secure location known as a Data Room. This process will help you identify and address possible issues of concern for a purchaser.

 

6. RISK ASSESSMENT / EXPECTATION ALIGNMENT 
   Having engaged in the exit process and started off down the track, it’s time for you to pause and take stock. Initial discussions with advisers, and the process of compiling financial information and putting together the data room will have uncovered facts, situations and circumstances both good and bad requiring careful reflection and possible action.

 

7. PROPOSITION PACKAGING AND PRICING 
   You will now have to hand all the data, facts and figures to put together hopefully a compelling proposition for potential purchasers. Actions taken to date have been cloaked in secrecy away from prying eyes but, working with your advisers, you’ve now reached the point to start letting people know your business (or at least a business in your market) is for sale.

 

8. GET TO MARKET 
   Promoting the business opportunity that is your company is a task best left to your professional advisers. They need to follow a proactive approach with the objective of generating maximum interest as quickly as possible. A competitive bidding or auction situation will undoubtedly increase the chances of you achieving your desired exit value.

 

9. ONLINE DATA ROOM & QUERY SUPPORT 
   After expressions of interest have been qualified and timewasters eliminated, the data room can be partially opened. By this time interested parties will have signed the confidentiality agreement and know your business identity. Exactly how much information you share with them will depend on their identity and your views as to their stated motivations.

 

10. PRESENTATION 
    During your exit presentation is the moment that you and the rest of the core exit team bring the business to life. This may be the first opportunity you and the prospective purchasers get the chance to meet. So to avoid unsettling employees and also ensure there are no interruptions or distractions, this meeting is best held in a neutral location such as a hotel or the offices of your advisers.

 

11. PREFERRED BUYER SELECTION (INC. PROOF OF FUNDING) 
    After the presentation, hopefully there will be a number of interested parties who still want to buy, ideally the same list as those you are prepared to sell to. These will have been followed up by your corporate finance adviser and a deadline for offers set. On receipt of offers in writing, you proceed to select your preferred buyer.

 

12. EXCLUSIVITY AND DUE DILIGENCE 
    After acceptance of what is likely to have been a conditional offer, your preferred prospective purchaser will want to be given a period of exclusivity to perform further detailed due diligence on your business. After this time either the deal will move towards contract completion or the prospective purchaser will withdraw their offer.

 

13. DEAL FINALISATION 
    During the due diligence process, the preferred bidders legal representatives will have reviewed and commented on the draft sales agreement. With the offer now progressing, the final terms of the sale contract need to be negotiated and agreed. In addition to this, there will be a huge number of other documents requiring signature.

 

To get a free download of the complete document please go to… http://financialpower.biz/exit-strategy-checklist/

 

Financial Power was founded by Trevor Wilson and is a specialist management consulting firm specialising in business exit preparations and deal structuring.

 

For more info please go to http://FinancialPower.biz

 

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