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9 options to exit your business

9 options to exit your business

This instalment explores all exit options available to the owner of a business – and a case study to demonstrate the importance of getting it right. When we start the exit conversation with a business owner he invariably sees the sale of his business to a third party (aka a trade sale) as his only option. However, there are other options and the ultimate choice must be tailored to the owner’s personal objectives, especially where big sums are at stake. The morale is to explore your options carefully. Options other than a trade sale: Intergenerational transfer– once owners realise the downside of this option they often decide…

Vendor Delusion: the biggest hurdle to clear when acquiring a business

Vendor Delusion: the biggest hurdle to clear when acquiring a business

Research proves that the great majority of business owners delude themselves about how much their business is worth. 80% of businesses <$50M put on the market fail to sell – (Tom West, President Business Brokerage Press) And the single biggest reason for this is over-valuation by the vendor. If you are acquiring a business or about to do so, then this research has clear implications, as does the solution I am about to discuss. Unless you address this vendor delusion you may have to walk away from the deal. When this happens you are in what Steven Covey would have referred to as…

The one financial score every CEO and owner should know

The one financial score every CEO and owner should know

For many CEOs & business owners, financial accounting is not their forte. In the mid-tier market we operate in, clients are often more entrepreneur than accountant – as you would expect. They are focussed on doing what they do best, and do not have the luxury of time to dig deep into their financials. As a result, they place considerable trust in the competencies and bona fides of their internal CPA or bookkeeper. And to be fair, it is not unusual for a business to outgrow the capabilities of the bookkeeper who started when the company was working out of the garage. In…

Dream more, expect more and care more…

Dream more, expect more and care more…

“Dream more than others think practical. Expect more than others think possible. Care more than others think wise.” – Howard Schultz (Chairman and CEO Starbucks). This quote has resonated with me so much I have posted it front and centre where I can see it every day. I found it in George Kohlrieser’s excellent book on leadership which I am currently reading – Care to Dare. Let me explain why, one sentence at a time. Dream more than others think practical. For anyone who has been a participant in one of our problem solving workshops, the first worked exercise is on those…

Raising Capital to Fund Growth

Raising Capital to Fund Growth

How you can turn the tables on the investors   Banking colleagues and investor friends of mine often despair at how poorly businesses present when seeking capital – debt or equity.  Sometimes the business fails on the very basics such as a projected cash-flow. Back-of-the-envelope presentations no longer attract capital via investors or banks. A new & measured approach is now required. If you present a half-baked case you will struggle to raise capital. There is a better way. A client of mine recently presented to their bank a very clear and concise strategy. Integral to the strategy were metrics (KPIs). Each…

Make sure you leave something for the grandkids

Make sure you leave something for the grandkids

This is not an unusual story. In fact a liquidator friend of mine in Sydney tells me this story is not uncommon. Many owners get to retirement age or run out of steam and simply wind things down. Then they call my friend in his capacity as a registered liquidator to complete the liquidation. Where there was clear saleable value before, ends up as only fire-sale value. Here is an extract from an excellent book by John H. Brown, “How to run your business so you can leave it in style”that drives home the point of this blog. I met with…

Smarter business exit decisions

Smarter business exit decisions

Should you be planning on a business exit or liquidity event for your business, back up a little and consider all your options, BEFORE making any major decisions. This post should start you thinking about the many options open to you in a business exit. Do any of these strike a chord? An acquisition opportunity is on the radar A strategic joint venture An unexpected approach from a trade buyer Realisation that its time to exit your business  Intergenerational transfer The irony of course is the bigger the challenge and the greater its consequences, it’s often the quicker the fix that is applied – which will inevitably come out of…

Looks like a balanced scorecard – but is it?

Looks like a balanced scorecard – but is it?

A management team that believes it has a balanced scorecard because it dutifully reports on its KPIs every month may likely be kidding itself. And such a mindset could be doing the organisation a disservice, as they say ‘having the ladder against the wrong wall’. Whereas most KPIs frameworks have grown ‘topsy’ over time, the balanced scorecard is a carefully thought through and agreed set of performance indicators providing early indicators of successful or unsuccessful business strategies – including more immediate problems on the horizon. Something your financials alone fail to provide. The scorecard is also aimed at getting people…

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