Knowing When To Exit Your Business
You are considering selling your business. Market conditions may have changed, you may have met your growth goals, or you might be preparing for retirement. Regardless of the reason why, you want to make sure selling is the best decision for you, your family, your business and your employees.
The first step in making an exit for your company is to meet with an advisor who can assess the value, market potential, and readiness of the business for sale prior to listing it. Second Wind’s approach is focused on making you aware of how to maximize the value of the entity and then laying out a plan to prepare you for the transaction. The best deal will be built upon a holistic strategy including timing, financial performance, systemizing operational efficiencies, creating a due diligence package, and generating demand amongst potential buyers.
Timing: Is Your Business Ready?
Under an engagement with Second Wind, an operational audit is conducted which will assess the ideal timing for a business exit. The duration of that timeline will vary based on the financial condition, historical performance and market forces of the business. Some businesses will need to eliminate and control expenses and then allow some time to pass to demonstrate improved performance and a growing bottom line. Other companies require getting to market quickly to take advantage of surplus demand or other market fluctuations. In the end, timing preparedness will have the most profound effect on the final transaction price.
Financial Review: Is Your Business Performance In Line With Expectations?
When determining whether to list your business for sale, it is essential to understand the current market value of your business and how it can be improved over time with strategic initiatives. Second Wind completes a financial review of all potential clients and can weigh historical financial performance against Key Performance Indicators within a given industry. Armed with this information, Second Wind can show you the current “as-is” value as well as how strategic recommendations will improve financial performance and the company’s valuation.
Operational Efficiency: Identifying and Exemplifying Your Competitive Advantage
On the path to a successful closing, potential buyers have to be made aware of what exactly your business does well. Whether its customer service, logistics, manufacturing or something else, being able to clearly define and illustrate what you do better than your competition will both drive the value of an eventual transaction and keep potential buyers invested throughout the due diligence process. Second Wind’s operational audit will identify these strengths and help you discover key employees, core competencies and other sources of value.
Preparing a Due Diligence Package
Most deals that fail to close do so during the due diligence process. Second Wind’s approach is to prepare all traditionally-viewed due diligence items into a package before listing the business for sale. The ability to provide all relevant information immediately after signing confidentiality agreements with potential buyers is what leads to good selling prices and motivated purchasers. If a buyer sees a seller is responsive and fully transparent, they will be more likely to seek out that acquisition.
Create Demand
After preparing for a sale, it’s time to list the business and bring it to market. Second Wind believes in an approach that doesn’t just blast a listing out to the world, but rather identifies a potential strategic purchaser and tailors the presentation of the business to that purchaser. Creating demand requires market research, market share analysis, understanding of the competitive landscape, and the review of potential vertical integration.
When you’ve decided to sell your business, Second Wind offers the advisory expertise necessary to ensure transactional efficiency and maximum benefit.