Heading for the exit

A business friend of mine has just seen his company sale fall through for the second time in two years. I was planning to exit my own business within the next three years, but his experience has put me off. What do I need to do to make sure I don't suffer the same pain?

Obviously you need to understand why it fell through for the second time. You need to try and evaluate, quite openly, what the reasons were. In my experience, a failure can very often be the consequence of inadequate planning in the business and inadequate understanding of the process to exit, which is linked to the planning. They might also have failed to seek the proper advice to lead them through the exit process. If the business itself had inadequate financial and strategic plans, the buyer might not have been comfortable with exactly what they were buying into. Finally, it could be that the succession management was inadequate; in other words did the owner want to exit the business and if so, had he thought about that two years earlier and got his team in position to be able to maximise the opportunity of exiting and also maximise the value?

To avoid suffering the same pain, you need adequate planning in all aspects: strategic, financial and succession management, and talk to someone who has been through a similar process before. A key question for a business owner thinking of starting an exit process is to ask themselves 'are they ready to handover the reins?' If the answer is 'No', then don't start.

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