Is it ever too early to have an exit plan?

By Lancashire Business View

05 Jul 2017

In association with

We often meet shareholders considering selling their businesses who have not carried out any pre-sale planning. Unfortunately shareholders often realise too late that they could have increased the value of their business and improved its saleability if action had been taken beforehand.

By Chris Summerscales, Seneca Partners Limited.

Why is sale planning so important? Can it ever be too early to start contemplating how you will exit your business?

For shareholders to maximise sale proceeds, a business has to be performing strongly and have growth potential at the time it is sold.

There is no magic formula which specifies the time is right to sell, however a key driver is almost always its trading performance.

A higher value is normally placed on a business when sales and profits are growing and when the growth is expected to continue.

Profitable historic trading and growing sales alone though do not make a business saleable if there are major issues, threats or risks attached to it.

Early planning to identify, address or mitigate any such issues (e.g. weak second tier management team, heavy reliance on key customers or the exiting shareholder, inadequate management systems and controls) always stands shareholders in good stead.

If issues are tackled in advance, shareholders will be well placed to contemplate a sale of their business at the point when its trading performance is strong and a potential purchaser can have confidence this will continue under their ownership.

Shareholders busy working in the business can often be so involved with its day to day running that they don’t see the bigger picture.

Consequently, unless advice is sought, they may be unaware of the significance of issues on the value of the business or the increase to the capital value that could arise from pursuing opportunities to increase sales and profitability. Irrespective of when you wish to sell your business you should always keep an eye on your eventual exit and make sure that the decisions you take in the years leading up to that point are consistent with your ultimate goal.

Latest news

1

PR agency wins third consecutive award for public sector work Viva Wins Third Public Sector Award

PR agency wins third consecutive award for public sector work

20 Jun 2024

2

Burnley aerospace firm eyes global growth with new CFO Rob Smith Of Velocity Composites

Burnley aerospace firm eyes global growth with new CFO

20 Jun 2024

3

Women's health in the workplace: the impact of the symptoms impact.png.png

Women's health in the workplace: the impact of the symptoms

20 Jun 2024

4

Are you aware of the consequences of dying without a will? Sara Jane Chorkley DRN

Are you aware of the consequences of dying without a will?

20 Jun 2024

5

Nybble makes senior client relationships hire Charlotte Knowles Nybble

Nybble makes senior client relationships hire

20 Jun 2024

Lbv116 Ltb Strip980
Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
RISE - The Academy for Female Leaders and Managers
WENDY BOWERS RISE Illustrstion copy.jpg.jpg
LBV Hub Seminars
11 Jun 2024 - 04 Dec 2024

RISE - The Academy for Female Leaders and Managers

East Lancashire Chamber of Commerce, Clayton le Moors, BB5 5JR

09:00 - 16:30

Free 4 Week Growth Ignition Coaching Programme
UCLan Primary logo RKE.png.png
LBV Hub Seminars
19 Jun 2024 - 03 Jul 2024

Free 4 Week Growth Ignition Coaching Programme

Online, Preston, PR1 2HE

12:00 - 13:30

Business Networking in Lancaster - BNI Castle
EVENT LISTING BNI Castle.png.png
LBV Hub Networking
20 Jun 2024

Business Networking in Lancaster - BNI Castle

Vale of Lune RUFC, Powder House Lane, Lancaster, LA1 2TT

06:45 - 08:30

THE ABSOLUTELY FABULOUS COMEDY DINNER SHOW
AbFab Social Post.jpg.jpg
LBV Hub Social
20 Jun 2024 - 20 Jun 2024

THE ABSOLUTELY FABULOUS COMEDY DINNER SHOW

Crow Wood Hotel & Spa Resort, Burnley, BB12 0RT

18:30 - 23:00

Business Networking in Burnley - BNI Kudos
EVENT LISTING BNI Kudos.png.png
LBV Hub Networking
20 Jun 2024

Business Networking in Burnley - BNI Kudos

Prairie Sports Village, Windemere Avenue, Burnley, BB10 2FU

06:45 - 08:30

Business Networking in Preston - BNI Brunch
EVENT LISTING SIZING Brunch .png.png
LBV Hub Networking
21 Jun 2024

Business Networking in Preston - BNI Brunch

Samlesbury Preston Hotel, Preston New Road, Preston, PR5 0UL

09:30 - 11:00

June Preston Freelancer Meet-Up and Coworking
Screenshot 2024-06-13 at 14.03.18.png.png
LBV Hub Networking
21 Jun 2024 - 21 Jun 2024

June Preston Freelancer Meet-Up and Coworking

Society1 Coworking Space, Preston, PR1 3LT

10:00 - 12:00

Moonlight & Memories Walk 2024, St Catherine's Hospice
Moonlight2024.jpg.jpg
LBV Hub Fundraisers
22 Jun 2024 - 22 Jun 2024

Moonlight & Memories Walk 2024, St Catherine's Hospice

St Catherine's Hospice, Preston, PR5 5XU

18:00 - 23:00

Yellow Day 2024 St Catherine's Park
YRD 2024_TV screen_V02.jpg.jpg
LBV Hub Fundraisers
23 Jun 2024

Yellow Day 2024 St Catherine's Park

St Catherine's Hospice, Preston, Lancashire

10:45 - 16:00

Chamber Breakfast Networking
Chamber Logo1.png.png
LBV Hub Networking
23 Jun 2024

Chamber Breakfast Networking

Whitewells Catering Supplies, Heysham, LA3 2XE

08:00 - 10:00

Adult Mental Health First Aid - Online Course
Youth MHFA.png.png
LBV Hub Seminars
25 Jun 2024

Adult Mental Health First Aid - Online Course

MS Teams, N/A, N/A

10:00 - 12:30

Business Networking in Chorley - BNI Endeavour
EVENT LISTING SIZING Endeavour.png.png
LBV Hub Networking
25 Jun 2024

Business Networking in Chorley - BNI Endeavour

Oak Royal, Bury Lane, Chorley, PR6 8SW

06:30 - 08:30

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV116 Online Graphic
Subscribe now

Weekly news bulletin