Exit planning is about building a business that’s attractive from the inside out.
When selling a house, experts talk about ‘kerb appeal’ and in retail, ‘window dressing’ is essential in attracting shoppers. In both cases, the objective is to create a positive first impression that makes someone want to take a closer look. The same principle applies when preparing a business for exit.
A positive first impression may open the door, but buyers are looking for much more than appearances. They want confidence that the business is well led, professionally run and capable of delivering long-term value. That’s why successful exits are built over time, not simply prepared at the point of sale.
Start with your vision
Do you have a clear vision of what you want your business to do for you? When I start working with a client, if their vision is blurry, without a distinct destination or route towards it, I start by helping with clarification.
This focus on personal ambition may seem outside the remit of a business adviser but, in fact, it’s at the heart of what Henchards does. A business is rarely an end in itself for the owner; it’s the means to an end, a vehicle for achieving personal ambitions. Only by understanding those goals can I really help a business owner develop their company to achieve them.
Start with the life goals for you and your family. What do you want to be doing? Where do you want to be? What’s important to you? What legacy do you want to leave? How do you want to spend your time? Your vision may evolve over time, but the important thing is that it’s yours.
Ultimately, how you plan, lead, grow and exit your business will make a huge difference to how close you get to that vision. Your vision should therefore underpin your business strategy, providing direction for the decisions you make today and helping shape the business you want to build for tomorrow.
Building a business that reflects your vision
Once you have a clear vision, the next step is ensuring your business reflects it. Every decision you make contributes to the business you are building, from the people you recruit and the culture you create to the way you communicate with customers. Together, these decisions shape how your business is perceived today and how attractive it may be to a future buyer.
How your business presents itself forms part of that picture. Your website, for example, is often one of the first places prospective customers or buyers will look. Is it easy to understand what you do? Does it reflect the professionalism of your business? Is the information current and relevant? While a website is only one example, it can influence first impressions and help reinforce confidence in the quality of the business behind it.
A well-presented business is often seen as a reflection of a well-run business, so why not start on the front foot in any sale or investment discussion? Presentation should support the value you’ve created, not attempt to compensate for weaknesses elsewhere.
Value comes from substance
Of course, some buyers enjoy seeing opportunities to improve a business. A refreshed website, updated branding or new marketing materials may all form part of their future plans. However, those are relatively small improvements compared with the qualities that really drive value.
The businesses that achieve the strongest exits are those where presentation reflects reality. Behind every good first impression is a business with clear leadership, capable people, robust systems and a clear sense of direction. When presentation and substance work together, they create confidence, reduce uncertainty and make a business far more attractive to future buyers.
Bringing it all together
Successful exit planning isn’t about polishing a business when you’re ready to sell. It’s about building value over time by creating a business with a clear vision, developing it with purpose and ensuring the way it presents itself reflects the quality behind it.
The businesses that achieve the strongest exits are rarely those that have simply been prepared for sale at the last minute. More often, they are businesses that have been strengthened over a number of years, giving their owners the opportunity to improve value, reduce risk and create greater flexibility for the future.
If you’d like to explore your options and get a clear idea of which type of exit might suit you over the next two to five years, feel free to book a complimentary conversation here.