7 Hurdles Business Owners Must Clear Before A Profitable Exit
Gavin Gibbons
Private Investor | Adviser & Partner On Scaling Your Business To Exit | Mergers & Acquisitions | Managing Partner at Next Level Ventures
Let's get straight to point.
If you're thinking about an exit from your business in the next few years, the odds are stacked against you achieving maximum value.
I've seen low valuations derail exits at the last minute, because the owners didn’t take the necessary action beforehand:
?? Leaving It Too Late To Plan Your Exit
The clock is ticking... yet so many business owners put off planning their exit until it's too late. By failing to prepare well in advance, you risk stagnating growth, not being ready for due diligence, and ignoring what will really get your valuation up. Opportunities will slip through your fingers.
?? Not Having A "Grow And Exit" Mindset
From the outset, you need focus on building a business primed for exit - not just a lifestyle company. This mindset impacts every decision - from company structure to operations.
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?? Getting Fixated On Revenue Over Profit
Vanity metrics like topline revenue can be misleading... cash flow and profit are king when it comes to valuations. Buyers want predictable, sustainable profitability. High revenue without margins are mostly meaningless at the SME level.
?? Lacking A Scalable Operating System
The lack of infrastructure and defined processes will put off any savvy acquirer from paying a premium. Now is the time to document, systematise and where possible, automate core workflows. Demonstrate how the business can thrive and grow without being owner-reliant.
?? Having The Wrong Management Team
A weak leadership team is a huge red flag for potential buyers. They need confidence that the right people can seamlessly continue driving the business forward post-sale. Be brutally honest about the gaps in your team.
?? Going It Alone Without The Right Guidance
Even outstanding business owners can sabotage their own exit through a lack of experience. The financial risk is simply too great to "wing it". Get the right advisory team in place, who can guide you towards the maximum valuation.
#nextlevelgrowth #exitlaunchpad #M&A #exit
Co-founder of Exeo Advisors and ExitEngine?. Co-host of The ExitEngine? Podcast. Helping Business Owners Maximize Their Business Value and Saleability.
7 个月Great list, Gavin. One thing I might add is that an exit plan should be reviewed and updated every year at least in order to be ready to sell if need be at any given point. An exit could be forced by unforeseen life circumstances at any moment. Knowing what to do and how to maximize at any given point can be key to exiting on your own terms ( or as close to) as possible. Thanks for sharing.
Serial entrepreneur helping startups raise venture capital
7 个月Going it alone is asking for trouble when it comes to exits.
Private Investor | Adviser & Partner On Scaling Your Business To Exit | Mergers & Acquisitions | Managing Partner at Next Level Ventures
7 个月Are you looking to scale up your business to the next level and exit within the next 36 months? https://exitlaunchpad.io/workwithus
Vice President of Operations (Fulfillment) at SnapCare.com | Top 15 Most Influential Filipino Women on LinkedIn 2023 | Keynote Speaker | Philanthropist | Property Investor
7 个月Seriously, getting the profit model dialed in has to be the top priority for any owner thinking of an exit. Buyers won't fall for smoke and mirrors.