I acquire and invest in businesses, so I look at hundreds of companies each month. I also get to see what increases company value – and what doesn’t. Here’s some food for thought…
The best time to start planning your exit is when you’re not ready to exit. Sounds counter-intuitive, but most business owners leave it too late to define the exit they actually want. So they focus on the wrong things and tread water, rather than funding the next chapter of their lives with the proceeds of an exit.
Your business needs to flourish without you. That’s very different than saying that your business can function while you’re away on holiday for a few weeks. Would your business would actually GROW in your absence, over the next 6-12 months?
Your opinion doesn’t matter when it comes to valuation. So many business owners focus just on driving turnover and EBITDA. That’s important, but they rarely think about building value from a potential acquirer’s standpoint. Understanding WHY a buyer will pay a premium for your company shouldn’t be an afterthought.
Size matters. Your valuation mutiple improves when your business scales beyond certain EBITDA thresholds. And you’ll eventually reach a point, where the quickest and most effective way to increase EBITDA and overall company value, is through mergers and acquistions of some kind.
The truth is, the best exits aren’t accidents. They’re engineered well in advance. You can choose to build your business in the hope that an unbelievable offer simple materialises at the right time – but do so with an awareness of the risks.
#2025 #nextlevelgrowth #UKBusiness #exitlaunchpad