This article is supplied to GrownUps by Northington Partners
What do you need to address in an exit strategy?
Lifestyle
- Work life harmony and balance
- Life after sale of business
- Amount of Capital / income required on exit
Timing of Sale
- Target date
- Preparation of business for sale
- Economic and industry conditions
- Sale process
Maximise Value of Business
- Capacity to grow value
- Product(s) life cycle
- Value now / five years
- Optimal business performance
Identifiable Intangibles
- Commercialise goodwill
- Cohesive management team
- Legal protection (eg: patents)
- Removal of dependencies (customers / suppliers)
- Documented processes
Most Likely Buyers
- External
- Internal (Other shareholders / Management)
- Sound shareholders' agreement
- What do they value
Consideration
- Cash or deferred compensation
- Ability to pay cash
- Tax structuring of transaction (assets vs shares)
- Ongoing consultation role to business
Roy Austin – Northington Partners – Level 13, 52 Swanson Street, Auckland, New Zealand