Maximising Your Value From Company EXIT

From Lara Morgan


Founder of Company Shortcuts, a platform for entrepreneurs to access unique short cuts, check-lists and business performance measurement systems to free up time, increase effectiveness and help accelerate growth.

Having been approached as a young business to sell to a big player, resisted, tried to sell and failed, and then actively taken a business to market in 2008 and sold I feel I have learnt a great deal about the trials of the EXIT process.

There are many lessons to learn and practice well in advance of a sale in order that you maximize your value– I could not begin to include all the tricks of the trade in EXIT but I can share some of the key factors that may well make your journey better, more profitable and more likely to succeed.

  • Planning the process well in advance (no less than two years in advance) without being delusional about your business dependency on yourself is the starting point. Do you really have a management team that is allowed to manage, lead, make decisions and drive the business? Can you afford the distraction of the EXIT without the business coming off its numbers?
  • Learning the game and the language of EXIT
    The city buys and sells business as a job. You may do this once in your life. There is huge value in the process being exhausting, challenging, intellectually stretching, trying, painful and ultimately less profitable for you. Learn the language, the expected process and trust no timetable….there is no such thing – these are professional deal doers whom have loads of experience. Get a great team with you, an experience M&A lawyer and a solid accountancy practice with an advisor with special knowledge of your sector. This will add and protect your value. Pay them on results.
  • Asset awareness and manipulating your strategic fit to the expected buyer
    You can increase the value of your sale by really aligning your company values to likely buyers. Most people know to whom they are most likely to sell. Milk the fit.
  • Establishing your personal aims and goals
    Do not go into the stress of an EXIT which is costly in many ways without absolute clarity around your own terms and conditions of the deal. Have a BATNA (best alternative to a negotiated agreement) and write down the key terms that you personally will expect before walking away. (Sell early enough if possible that you have the strength and time to walk away.)
  • Understanding the pain of the exit process – keeping your eye on the prize 
    No one will convince you of the challenge ahead until you experience it first time round. When I say EXIT is a tough process I cannot stress enough the distraction, time it takes and detailed level and information you will need at your finger tips. Have a due diligence check list and data room ready well before you go to market. That small organizational investment will add value and reduce your anxiety enormously allowing you to focus on the games ahead.
  • Bolting the value to the floor for maximum return Licenses, contract with decent term time left, staff with good contracts, and all other valuable assets need to be secured. Do not leave these difficult conversations too late and do not be doing them whilst you are trying to realise value.
  • Beware the warrant and terms - Understanding the restrictions and returns for negotiated stages
    Be very clear, habitual decisions you made when it was your company will no longer be yours. Broken warranties should be insured against, it may save you a fortune and again the deal is not over until the cash is in the bank.
  • Transition, the role handover and for informing clients, suppliers, etc
    This is a far more challenging period than you can estimate until you are in it. Have a plan from the outset of what you are going to do in the near term and take the enterprise advice around doing nothing significant with your new found wealth. Rush nothing; you have the rest of your life to decide! Take a really good holiday. You will need it!
  • Life after EXIT – it’s your choice?

Find out more about Lara:
Her book: Lara Morgan, More Balls Than Most