Business Sales, Mergers, & Acquisitions
      Client Centered • Results Driven
Call to discuss your business:
615-519-5156

Exit Planning to Maximize Value

Maryn Williams • Mar 12, 2019

There is a saying among business strategist that you should run your company "as if you're going to sell it tomorrow". In other words, have all your customer, vendor, & employee contracts in place, train your employees so that the business is not overly dependent on you, streamline your systems and workflow and, most importantly, maximize your cash flow. If you have a facility, clean it up, get rid of waste, old equipment and unsellable inventory. Be sure your financials are clean and accurate. Update your operating manual or consider creating one from an online template if you don’t have one.

Using cash flow to fund growth in the early stage of a company may be the best option. But what if you've grown your company to the point where reaching the next plateau requires a huge cash infusion to obtain the necessary resources? What if you're reaching retirement age and you don't have the energy required? Or you're just getting burned out and you want to do something else?

This is where Exit Planning comes into play. I'm not talking about the type of Exit Planning that takes place about 5 years before you exit and requires a cadre of advisors. The Exit planning that I'm referencing should take place 1-2 years (preferably 2) before you exit the company and its sole purpose is maximizing the value of the business. The cardinal rule here is "don't invest any money in the business that a prospective buyer wouldn't". At this point your goal is to have cash flow as high as possible. Assuming that the other parameters mentioned above are in place, this should maximize the value of the business.
Share by: