Continuing from the last post, here are four more ways to better prepare for a business exit.
Before getting to the next four ways to prepare, I would suggest that the startup/company management always be talking to private equity types (if you can get their attention).
If you can get one of them on your side, even if they will not invest directly, you will often receive excellent advice.
A good PE type, and not all are good that’s for sure, are extremely knowledgeable and can help with everything from sales, and marketing to operations to product strategy.
Here are the four:
⇒ Long before the exit could happen make it a team effort. There are limits to this. The team must be quite small, only a handful of people. And it should operate like the CIA – on a need-to-know basis. Keep things confidential. Super confidential. Letting the planning become known can hurt the business performance and perhaps stop any deal in its tracks. Rumors can spread to keep everything quiet.
⇒ If a competitor wants to buy you, be careful and still honest. You may need to protect certain information/data in case the acquisition doesn’t go through. Keep client lists, product plans and details, code (if there is any), and strategies quiet. That being said, don’t burn bridges because you never know if you will come across a competitor again in the future.
⇒ Hire professionals to help. Don’t do this alone. For most business owners this is a one-time event. They just don’t sell a business or execute an IPO that often. Put together a team that understands the process. But also one that understands your business.
⇒ Accept that sometimes things are just out of your control. No person can absolutely control another. Protect yourself and prepare the best you can. But know that sometimes things happen that you cannot affect. It’s just how the world is organized.
I’d recommend reading my other posts on Exit Planning on this site for more information. Or give us a call.
