The Exit Strategy Handbook
A Complete Guide to Preparing Your Business for Sale
Written by Jacob Orosz, President of Morgan & Westfield
If you’re looking to sell a business that brings in $1 million to $50 million in revenue, you’ve come to the right place. The Exit Strategy Handbook demystifies the process of preparing your business for sale and helps you unlock real value in your business to dramatically increase your odds of success in the sales process.
A majority of your net worth may be tied to your company’s value, so maximizing the sale price is critical. Selling a home is child’s play compared to selling a business. You only get one chance – and The Exit Strategy Handbook shows you how. Planning to sell is all about building a business that buyers want to buy. By preparing well in advance, you’ll ensure you’ll receive the highest price possible.
The Exit Strategy Handbook isn’t theoretical. It’s based on more than 20 years I’ve spent as an M&A advisor in the trenches selling businesses and dealing with thousands of buyers, from strategic acquirers and corporate purchasers to private equity firms and wealthy individuals. The lessons in this book are rooted in both successful and unsuccessful transactions that have happened in the real world.
My goal with The Exit Strategy Handbook is to arm you with simple steps you can take to increase your company’s value and dramatically increase the marketability of your business.
It wasn’t raining when Noah built the ark.
My Goals in Writing This Book
Decide whether you should sell your business
Sell your business faster
Evaluate the salability of your business
Establish a range of potential values for your business from low to high
Maximize the value of your business
Discover the ideal exit option to maximize your price
Identify and mitigate the most significant risk factors that impact your business’s value
Prioritize the actions you can take to prepare your business for sale
Be prepared to sell at all times, especially with an unsolicited offer
Eliminate deal killers
Preparing your business for sale and maximizing its value can’t be boiled down to a few simple metrics. Rather, there are scores of factors that can affect your business’s value depending on its size, industry, location, employees, and myriad other variables. In The Exit Strategy Handbook, I walk you through dozens of factors to consider when planning the sale of your company and specific actions you can take to turn them to your advantage.
Planning to sell is all about building a business that buyers want. By preparing well in advance, you help ensure you’ll sell your business for the highest price possible. The Exit Strategy Handbook shows you how to:
I’ve seen many a deal die a preventable death. Why? It’s simple – lack of preparation. The more risk factors present in your business, the harder it will be to sell, and the less buyers will pay for it. Investing the time to prepare your business for sale helps you eliminate problems long before a buyer sees them and dramatically increases your odds of success. By examining real-world case studies of businesses that didn’t sell, I provide insight into the salability of your own business. This includes what can potentially go wrong, and the steps you can take to help ensure your company sells for top dollar when you decide to put it on the market.
The Exit Strategy Handbook also explores how long it takes to sell a business, what variables can affect the timeframe, and what you can do to speed up the process. The smoothest sales happen quickly. The good news is that most of the factors that increase the value of your business also reduce the amount of time it will take to sell, so if you want to increase the value and speed up the timeframe, the steps are often the same. This comprehensive handbook offers you powerful tools to prioritize which actions to take when preparing your business for sale that will both speed up the process and increase your business’s value.
Preparing your business for sale allows you to be ready to sell at any time. Why is that important? Because the best offers are often unsolicited. The advice outlined in this book helps ensure you maximize your company’s value regardless of when the sale takes place.
The value of your business can vary widely depending on the buyer and their specific reason for acquiring you. Most entrepreneurs aren’t sure what buyers are looking for or who the most likely buyer will be. Still, there’s a common set of value drivers that buyers within an industry tend to prioritize. In this book, I help you identify the type of buyer most likely to buy your business and help you focus on the value drivers most important to them. Understanding the type of buyer for your business and what they’re looking for is essential to maximizing your business’s value.
There are hundreds of ways to make your business more appealing to the right buyer. That’s where this book comes in. My goal is to arm you with simple steps you can take to increase your company’s value and dramatically increase its marketability. I then help you prioritize these actions to create the greatest impact on your specific business. Join me as I boil down my 20 years of experience into this concise guide.
President & Founder of Morgan & Westfield
Less than 30% of small businesses on the market eventually sell. Why? Fewer than a fifth of small business owners actively plan their exits.
Questions Answered in This Book
Why do less than a third of businesses sell?
How long does it take to sell a business?
What factors can affect how long it takes to sell my business?
Who are the four major types of buyers most likely to buy my business?
What do most buyers look for when evaluating a business?
How does the type of buyer affect its value, and how can you prepare for the sale?
How can the size of my business impact the multiple I receive?
Table of Contents
Chapter 1: Background Information
Chapter 2: Introduction to Value Drivers
Chapter 3: Deciding to Sell
Chapter 4: Exploring Alternatives to a Sale
Chapter 5: Exit Options and Buyer Types
Chapter 6: How Business Size Affects Value
Chapter 7: Normalizing Your Financials
Chapter 8: Measuring Cash Flow
Chapter 9: The 8 Essential Principles of Valuation
Chapter 10: Valuation Methods
Chapter 11: What Buyers Look For
Chapter 12: Products & Services
Chapter 13: Financial
Chapter 14: Customers
Chapter 15: Operations
Chapter 16: Staff
Chapter 17: Team
Chapter 18: Buyers
Chapter 19: Financing
Chapter 20: Due Diligence
Chapter 21: Taxes
Chapter 22: Confidentiality
Your task is not to foresee the future, but to enable it.
Antoine de Saint-Exupéry
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