Step 1 – Define the Personal Goals of the Owner
The owner must therefore balance his financial and interpersonal goals in order to find the best possible exit strategy
Step 2 – Understand that a Range of Values Exist for the Business
The value of a privately-held business depends largely upon who buys it. ‘External transfers’ to other industry players, financial groups, or by initial public offering, command more liquidity ‘up front’ while the owner relinquishes more control over the company
Step 3 -Examine the Options Available for the Transfer of Shares
There are three primary purchasers of privately-held business stock (or assets):
Parties to the transaction and types of transactions available (samples; not a complete list) qFinancial Groups – Recapitalization qIndustry Buyers – Acquisition (at Synergy Value) qInitial Public Offerings – IPO (at Public Market Value)
Step 4 – Provide Full Financial Disclosure to the Buyer
Assembling financial records and presenting them to a buyer is very time consuming, not a lot of fun, a very personal survey of how the business is run.
Step 5 – Assemble Your Advisory Team – Don’t Go It Alone
Invest the time and money in the right team of advisors; a successful business exit is more than worth.