The 10 most common mistakes when planning a company exit 1.- Time: wait right at the time of the sale A common mistake that owners of small and medium-sized businesses make is not considering leaving when things are going well in the company. 2.- Reaction versus pro-action - waiting for the transactions to come to you You may be lucky but better not count on it. Finding the right buyer takes time and effort. There will always come an exit opportunity that will make sense, but without a deliberate plan and implementation, the probability of making a good trade is greatly reduced. 3.- Concentration: not considering all offers You can choose to leave the company in several stages or in one go. There are several options such as the following: a) MBO or acquisition by the management team itself b) Sale to a financial buyer c) Recapitalization Sale to a strategic buyer d) Sale to family members 4.- Distraction Running your company is a full-time job. Planning the exit is also. How can you do it? Using all the resources at your disposal. Get help from competent professionals and do not deviate from the goal of continuing to grow your company. 5.- Valuation: not knowing what your company is worth You can't know where you're going if you don't know where you are. A good start is knowing how much your business is worth. You can then decide if that value matches your exit plans. If so, it's time to check out. If it doesn't match, it's time to increment the value.
6.-Thinking about the future: high vision for after the start.
One of the questions that assail the seller is: What would you do if you did not have this company? A proper exit plan helps address these personal issues. What do you want to do with your life apart from running your company? An additional question is: how much money will I need to do what I want to do? 7.- Taxes: not planning the impact of taxes.
Planning in this sense is one way of considering how to minimize the fiscal impact. Although it should not be obsessed either since it is one of the many aspects to consider.
8.- Resources: not using professionals correctly.
In addition to controlling the times well, it is equally important to have trained professionals. You are an expert in running your business so you shouldn't let a consultant take that role. It would be a problem if, in the limited time that you have, you were to dedicate yourself to becoming an expert in legal matters, accounting, taxes, valuation, etc. Don't try to do everything yourself and be sure to do it with ethical professionals. Be sure to choose well that person who represents you in the market.
9.- Lack of experience in transactions: understanding the term to close an operation
Properly closing a transaction takes time. Even with flawless execution, unexpected challenges are bound to arise until you get to the negotiating table. It is imperative that you and your advisors are aware of all the key details and parties to the entire transaction in order to properly address these new issues and to keep the process on track.
10.- Unnecessary complexity: do not make it too simple, nor too complicated
While planning your outing comes with challenges, you shouldn't overdo it. If you think it's too complicated, you may not start the process off right and therefore think about exiting only when you really have to. And there is no need for that to happen.
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