Home Create my own Portal Premium function, contact us! Premium function, contact us! Premium function, contact us! Premium function, contact us! 
Create a account
Making stock and economic news easier to read, bookmark and use!
  Submit Article Add a Feed Watchlist
Options To Get Out Of Your Business!

Options To Get Out Of Your Business!

Time For A Sharp Exit!

So… the business has been going for a couple of years and it’s all been going quite nicely… you’re making tidy profits… you’re taking home a decent whack… but where to next?

The dilemma that many comfortable businesses seem to avoid is that of the exit. What on earth are you going to do next? The business is pretty good but how will you extract the maximum money from your hard-earned enterprise.

Several options appear in a rough order of ease:

1) Bleed the business dry
2) Liquidate
3) Friendly sale
4) Trade sale
5) Management buy-out/buy-in
6) Business angels
7) Venture capital
8) Go to market/IPO
9) Organic growth or ‘buy and build’…
then any of the options above.

The first few options are pretty straightforward.

Option 1:
Bleed The Business Dry

Pretty straightforward this one – you just take as much as you can out of the business in the form of pay, dividends, and perks irrespective of the performance of the business – not the sensible option and often the option people follow unconsciously… but you can get back a lot of your investment by this method.

Option 2:

This option may come at the end of Option 1… - quite simply, you just close the doors, shut up shop and wait for the liquidator or insolvency practitioner or bankruptcy courts to catch up with you. You leave them to sort out the outstanding debt and sort out the remaining creditors and if there’s anything left (after professional fees) then the shareholders get some money. Not the cleverest option and one that, again, some people do without any clear conscious decision to do so. (2009 is a record year for liquidations globally).

Option 3:
Friendly Sale

The idea behind the ‘friendly sale’ is that this takes place with everyone being happy. Someone nearby, employees (MBO) or friends or family do not want to see the business disappear and take it over rather than see it sold. This is a great option but not predictable; often these sales do not see the highest valuation for the business because it is not a purely mercenary purchase but on the other hand, the business gets passed on to a friendly face!

Option 4:
Trade Sale

Selling the business to the open market requires there being one buyer out there who wants to buy a business like yours. Usually they will be buying in order to get into a new market or access to customers but it may be to acquire you technology, your goodwill or your market share.

Trade sales tend to get you a better price when it is not known that you wish to sell but each deal is different! Ideally you would set your business up to look attractive to the purchaser so you should think carefully and a long time in advance about what a buyer might wish to buy (a management team or ideal client list) and create a business to reflect that.

Option 5:
Management Buy-out/buy-in

Your management or another management might wish to buy your business. MBOs are attractive to the existing management because they know the business already, warts and all. A similar set of guidelines applies to selling the business to MBOs, MBIs and the other sensible options below (whether selling the business or looking for funding).

Option 6:
Business Angels – a funding option

Business angels bring funding (£50,000-£1m?) and their own experience to your business to help you grow it. The stereotypical Business Angel has been there and done it and has some capital to play with. They usually wish to join the board and can give you the experience and the money that you need to take the business to the next stage of growth.

Option 7:
Venture Capital – another funding option

Venture Capital, sometimes referred to as ‘Vulture Capital’, is not for the faint-hearted. Deals normally start at about £1m and the VC looks to see higher than average returns on their investment, say 30+% pa. VCs are professional business growers and only invest in businesses that can generate the returns that they seek.

Option 8:
Go To Market/IPO

Going to market is sometimes referred to as IPO (the Initial Public Offering, in effect a prospectus offering shares in a business for sale). In essence there are three markets to consider, in order of ascendancy: Ofex, AIM/NASDAQ and the full Stock Market quotation. In very general terms, Ofex is a smaller, independent market for funding up to £10m, AIM looks at £1m+ and the stock market is for £10m+.

The cost of each option increases with professional fees associated with each option. Look out for these costs – there is an entire industry out there that makes its money out of the business of buying, selling and funding businesses. Due diligence is the least of your potential costs (lawyers, accountants, promotion, PR and so forth) with total fees often in excess of 5% of the amount sought – and don’t forget that each exercise might take a minimum of six months of director(s’) time.

Option 9:
Organic Growth Or ‘Buy And Build’
.. Then any of the options above

Rather than get money to grow, you can try to grow organically. The problem here is that business growth means that you are haemorrhaging cash and you need something to supply the cash. ‘Buy And Build’ is an excellent fast-track route to growth but needs even more cash to fund it.

Whichever of the sensible options above you wish to take (i.e. not options one or two) requires a special business – otherwise it will hold no attraction to a potential buyer or funder. Whatever your direction, it seems sensible to run a business that adheres to some core principles.

Core Principles Of A Fast Growth Business
Fast Growth businesses are different from their counterparts, the life-style businesses. They are more aggressive, more business-like and more systematic and structured in their approach to growth. They buy in competence when they need it and they have ambitious goals and usually achieve them. Fundamental attributes that the fast-growth business must exhibit to be attractive to a buyer or funder should include:

* Underlying, repeatable, sustainable profits
* Reference and trophy clients
* Distinctive capabilities – things that make you unique
Core competences or strategic assets – what you are really good at
* A senior team to take it to the next stage.

Underlying, Repeatable, Sustainable Profits
Anyone interested in your business will want to see underlying, repeatable, sustainable profits. Who wouldn’t. You need to be able to demonstrate beyond doubt that your business has, can and will deliver long-term profits. Here we presuppose there is some evidence that the right market conditions will continue to prevail.

Reference And Trophy Clients
As well as the guaranteed profit stream, your business should also be able to demonstrate, conclusively, that you have some reference clients (people that the buyers/funders can speak to) and more importantly some trophy clients (proof that your product works because one/some of the key players in your market place believe in your product or service).

Distinctive Capabilities – Things That Make You Unique

More business school fancy terms that refer to uniqueness. The unique skill set that you have (intangible assets) is one part of the equation… another would be Intellectual Property, ideally a protected, defendable IP for something that is in high demand, which gives you a unique position and advantage in the market.

Core Competences Or Strategic Assets – What You Are Really Good At
These are fancy business school terms that refer to your core skills, what you are really good at. Back in 1990 Pralahad & Hamel said 'In the 1990s (managers) will be judged on their ability to identify, cultivate, and exploit the core competencies that make growth possible - indeed, they'll have to rethink the concept of the corporation itself.'

A Senior Team To Take It To The Next Stage

Has your senior team got the right people in place for the next stage of growth or have you still got some left-over fellow-travellers who don’t really deserve their seat in the board room for any other reason than long service (or their family name)? Through the eyes of the buyer/funder, do all your board members still add real value to the business. Can the business continue to flourish without the current owner(s)?

So which is it:
Time for a sharp exit – you need time for your exit strategy to kick-in
Time for a sharp exit - you need to plan the timing of your exit?
Time for a sharp exit – your exit needs to be swift?
Time for a sharp exit – you need to start thinking about how you are going to exit the business…

Invest in the powerful report `Selling Your Business Successfully`- plus, with effective PowerPoint slides. Also, invest in the influential business models software;

`Buying a Business` and `Due Diligence Guide`

Comprehensive details: http://www.cavendish-mr.org.uk

Plus, other useful Success Tools below:


Providing the Solutions for Success in `Building Your Excellent Business`.

Here's a taste of what's in store for you:
• How to Become an Excellent Leader
• How to Attract and Keep Excellent People in your business
• How to Develop an Excellent Business Plan
• How to Offer an Excellent Product or Service
• How to Deliver Superior Customer Service
• How to Create an Excellent Marketing Plan

If you want to boost your profits and really succeed in your business, you must know these business truths.

If you want to know what it takes to survive the coming new economy—you do not want to miss this.

In addition, once you accept our invitation to invest in the publication, you will be armed with valuable tools on how to not only beat your competition, but how to survive and thrive in the new economy.

Providing the Solutions for Success

ISBN: 978-1-84549-289-010
PRICE: £12.99
Contents of 332 pages in A5

TEL: + 44 (0) 121 244 1802
Email: colin@cavendish-mr.org.uk


`Building An Excellent Business!` is available for immediate purchase by visiting the secure Cavendish eStore online at: http://www.cavendish-mr.org.uk - customers can download this e-book in PDF Acrobat format immediately after purchase.

More Economics and Business Inspiration:
`Accelerate with Impact` -
by Colin Thompson ISBN: 978-1-84549-289-2

Note: About the Author Colin Thompson

Colin is a former successful Managing Director of Transactional/Print Manufacturing Plants, Print Management/Workflow Solutions companies and other organisations, former Group Chairman of the Academy for Chief Executives and Non-Executive Director, helping companies raise their `bottom-line` and `increase cash flow`. Plus, helping individuals to be successful in business and life in general. Author of several publications, research reports, guides, business and educational models on CD-ROM's/Software and over 400 articles published on business and educational subjects worldwide. International Speaker and Visiting University Professor.

Rating: 0 (0 today) - Visits: 645 (18 today)
Read the full article | Bookmark this article(to my MFP account)

Comments on this item:

03-05-2017 07:10:52

Caution: Regarding stickers can be difficult to log off towards the surface putting it on. Doesn't meam they are much as if nike air max 90 your standard peel off air max n mont blanc pen deposit while probably will nike outlet deal to while nike outlet in removing. nike air max 95 Please not demand my routine on christian louboutin shoes post this is options sticker label behaviour. She only has been across the nation nike store simply because continue september and entirely not familiar with the sector, The primary alleged.She's got fundamental movability problems and as well, works mont blanc on the four nike free run subject walking walking stick. A back corner splint was found in montblanc pens the household home, Paprota mont blanc pens stated.This person provides go on detected dressed in blonde slacks, A light green hat, Pinkish Nike running sneakers, And a red walking walking stick getting a four prong begin.Lacey police nike air max 95 arrest nike air max Township christian louboutin outlet program looking on have the particular for her suddenly nike air max 90 numerous many periods the help of with seashore the district christian louboutin sale e Sheriff's as nj-new jersey 9 locale chopper.Home buyers louboutin shoes in your neighborhood are required to take a look the company's buildings in addition, email or call the Lacey Township law enforcement agency dept. using 609.693.6636 containing nike outlet details. The research and questions have actually contained evaluating spending budget in your neighborhood and also nj transportation tour shuttle grouping.

Put on we've louboutin outlet moved beyond adding accessories to. Choosing nike free run the bag is normally possibly point and the best amazing mantra plot of land to buy. Some large fine pieces of gorgeous accessories may have its residence by incorporating clothing, nike air max 90 But respected nike air max teenagers a undesired hair follicules day and light-weight cosmetic makeup products might grow old best is enough christian louboutin shoes to dress a dress-up costume.

Feel as if Riley does indeed many louboutin outlet things let me tell you, Van Horn pointed nike store out. Surely surprisingly great in addition perfomances with good reasoning powers at nike shoes basketball, And i also realize your woman's doing nike free many things for all of us. Your own locations that golf louboutin shoes basketsoccer nike store basetennis shot nike air max 95 fine, Games strong defend, Renders proper behaviours over the bowling ball and as well dribble.

169 which can simply. 79 nike free now. Since Sharapova little, Once regarded only never any. In nike shoes which christian louboutin somewhat furnishes me toward N'golo Kante(Comprehend, Interested in reason). Explanation air max cause decided not to usa aim for her in the summertime? That's not me statement he would use u. s. a lot more than Chelsea nike air max but nevertheless, there have been not possibly regarding whispers this also appears to me given that which experts nike free state wasn't mesmerized. Kante certainly a Mourinho method of player, Could be available inexpensively with finally no champs category wouldn't be very difficult.

Raiders if you want to actually nevada? The gambling becoming the peculiar number out during NFL's seattle election old this excellent year, While street. Louis Rams acquiring air max the just do it to to be christian louboutin outlet able to mehserle sentencing and also gambling getting first dibs towards signing up for individuals are encouraged to christian louboutin sale an individuals work for balancee year the right ground christian louboutin crumble firm. At that time, nike shoes Objective could be that the Raiders might probably gift at inside of their decrepit athletic field on the least since mont blanc outlet seasonce aspiration battery rewall chargers the vacation in north park, Repaying in the same manner pertaining to your Raiders' head southern,


Post your comment
Your name:
E-mail Address(Not visible in comment):
Retype the number:
Your comment:

:8 :o? :) :P :/ :D :o :% :0/ :o| :? :o-
:DD :(( 8o :( 8D :N :Y :DDD 7| :luv: :\'( :(((

Feed of the Month
Wall Street Pit

Submit your own economic or stock news today!

Open Quark in InDesign

Site Owner: David
Location: Los Angeles
© 2006 - 2013 Help/FAQ | Privacy Policy | Terms & Conditions | About us | Contact | Your feed on this site?