Some may consider it a foolish notion to begin planning for the sale of a startup from the moment that it becomes successful, but in doing so, one can find the highest value for a business which may have reached its terminal velocity. A merger and acquisition is something which any startup CEO should be looking into, from the very moment that the business has reached success, with analytics and finances also in great shape. An M&A will not happen overnight of course, which is why the preparation work is so important and here are some of the ways that business owners can plan ahead for the exit, while still maximizing the amount of money that they can receive when they do.
Simply having a great product or a great business is not enough for people to be interested in a CEO deciding to exit, one must also build up credibility in relation to the business. Working within the sector, it’s important that a startup’s owner is vocal about the industry, about their own business, and contribute regularly to the changing face of the sector.
Hitting the Circuit
Using the credibility that has been built up through article contributions, podcast guest slots or any other way the CEO has decided to drum up some credibility, the public speaking circuit awaits. Not only does speaking publicly gain further credibility, it also gives owners the chance to sing praises about their business, well in advance of looking for the exit.
Most M&A are made by companies within the same industry, and this is why networking in and amongst other founders makes for such a great idea. What this does is tests the waters amongst fellow owners to see who may be interested – for future reference of course – but it also gives access to the fellow business owner’s contact list, which could help with a profitable exit further down the line.
Get The PR Machine Rolling
The key reason to plan an exit well ahead of time is to maximize the potential profit. During this time it is vital that a business has everything lined up and in place, and that it’s telling the world about it. Finding a USP, growing a brand, having an identity, a strong customer base, a great product, solid contacts, these are all keys to an attractive business which need to be put in place. Once these pieces are in place, the world should know about it through a smart PR strategy.
Hitting the Right Moment
Knowing when to sell a business is often one of the hardest aspects of the exit, and many business owners lose out because they sell at the worst possible moment. A slow market is not a great time to sell, nor is selling when the company is posting poor results. The best time to sell for the big money, is in a blossoming market when the business is crushing it, sell at this time, and the value of the company will be sky high.
Plan the M&A from the beginning, and the profitable ending will look after itself.