How to Prepare for an Exit Event

Your exit strategy and succession plan is dependent on your exit goals, the type of business and the target buyer (i.e. strategic buyers, financial buyer, family business). If you are a family-owned business owner, read more about your options in a previous blog post, Family-Owned Businesses: Are you prepared for what’s next?. RVR will work with you to construct a succession plan based on our research, analysis and recommendations of how to best accomplish your business goals.

Here is an example of a seller profile that will help illustrate RVR’s exit strategy approach:

Envision yourself as a business owner in your late 50’s who is married and has two children, one child is currently in college and the other has worked in the business for five years. You have built a services business over the past 10 years which operates as an LLC, where your partner has 20% equity and plans to remain in the business for 10 more years.

Example Company Financials – LLC

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The company steadily grew during the first 4 years, broke even during years 5 and 6, and became increasingly profitable years 7 through 10.

Example Business Exit Value

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Business Valuation Calculator

To produce a quick estimate of your company’s value, Hadley Capital has developed a Business Valuation Calculator (http://www.hadleycapital.com/business-valuation-calculator). This calculator considers factors that will impact the EBITDA Multiple and Valuation, including customer diversification, company type and the second-tier management team.

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Exit Strategy Objectives

Based on the Company’s net proceeds of $4 million and your other assets, how long will your net worth last?

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By understanding your personal cash flow, you can determine if your net worth post-sale is sufficient to maintain your desired lifestyle, given anticipated tax implications and other expenses. RVR will help you define personal and business exit strategy objectives that account for you and your family’s future needs.

Are You Ready to Start Planning Your Exit Strategy?

RVR has been involved in over 150 mergers and acquisitions on both the buyer and seller side. RVR was founded to help business owners achieve their personal and professional goals through our proven experience and success positioning companies for growth, turnaround and/or an exit event.

To get started, RVR will meet with business owners to discuss, research and evaluate:

– Current Business Assessment

– Value Proposition

– Product & Service Differentiators

– Buyer Type (Strategic, Financial or Management Buyer)

– Market Analysis of Potential Buyers

Valuation Analysis
Timing
– Competitor Analysis

RVR is a regular participant in community seminars, panels and networking organizations that cover exit strategy planning and management. Follow our social media accounts for the latest news and events, or contact us directly to schedule an introductory meeting.

Published on 19th June 2014 by Jessica McKeeby
Categories: Strategy

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