EDGEMONT CAPITAL BLOG

3 Simple Steps for Starting Your 2018 Exit Plan

healthcare investment bank

 

As 2018 gets into full swing, many businesses are evaluating their future plans. Owners contemplating an exit may dip their toe into the water of exit planning. Now is a great time to ensure your business is truly ready for a sale. Here are three simple strategies to help you get your exit plan together and begin to prepare your business for a sale.

Establish Exit Goals
Why do you want to sell your business? What will you do next? You don’t need a formal document or a pricey consultant. You just need some time to think. The critical questions you must answer include:

  • What is the ideal transaction? How does it look? What are the terms?
  • How much money do you need to sustain your lifestyle or achieve your retirement goals?
  • What do you plan to do after you sell? What price is necessary to make that dream a reality?
  • When do you plan to sell your business and how long will it take to prepare?

Meet With an Business Advisor You Trust
Just as sharing resolutions with a family member can keep you committed to the goal, talking to an advisor you trust can help you get on track for a successful sale. Speak with someone who has some experience in M&A—a lawyer, accountant, or business mentor—whose opinion you trust. Ask them how realistic your goals seem and invite them to share recommendations or refer you to trusted advisors.

This conversation encourages accountability. It helps you adopt a realistic perspective and can keep you motivated to move toward a successful sale. It may also inspire new thoughts and creative strategies that can ultimately help make your sale dream a reality.

Know What Your Business is Worth
It’s difficult to be objective about something you’ve poured so much of yourself into. Don’t rely on your own intuitions about value, but rather gain insight from a disinterested party to execute a fairness opinion. A valuation can be a helpful wake-up call that encourages you to streamline operations and address liabilities. It may also help get you excited about the sale.

The current sale value is a major factor in whether or not selling now is a good idea. Therefore, knowing how much you can expect may ultimately sway your decision in one direction or another.

A valuation also offers insight into how the sale might be structured. This can help you assess your options and save you time and money as you choose your exit plan. The valuation process can also help you gather documents you’ll need for due diligence. This preparation can make the sale less stressful and shorten the timeline to closing.

2018 Exit Planning
These three simple steps offer fertile ground for sowing the seeds of a sale. They offer value no matter which direction your sale plans ultimately go. They can also greatly reduce the workload you’ll face if you do decide to sell. And if you don’t sell now, exit planning may help you plan for the future, inspire a more aggressive approach to growth and revenue, and help you understand in what direction your company needs to move.

Edgemont
Edgemont Capital Partners is a specialist healthcare investment banking firm. We focus on the needs of founder-owned and entrepreneur-run healthcare and life sciences companies in the lower middle and middle markets. Our world class transaction expertise is a result of our extensive and proven track record of success. We have advised on over 100 transactions representing more than $30 billion in combined value.