Consider your exit strategy when starting up - PART 3
The exit process
The process you will have to go through will depend on how you are exiting the business.
Selling the business
If you are selling the business there are several stages you will go through:
- grooming your business for sale
- valuing your business
- identifying and marketing your business to potential buyers
- negotiating with potential buyers
- completing legal due diligence
- finalising the sale and transferring ownership
Prior to the sale, you should get the business into shape by reducing overheads, debts and excess stock and getting your finances into good order. You will also require detailed financial information, including audited accounts and forecasts which you can prepare in advance. I will provide some detailed information on all these detail issues soon.
You should seek specialist advice from your accountant, solicitor or corporate adviser. They will help you reach a realistic valuation, and identify and market your business to potential buyers. I will provide some additional information on how to value and market your business soon as well as on how to complete the sales process.
Flotation
Businesses planning a flotation will go through a similar process and will require a detailed business plan, prospectus and accounts which comply with specific accounting standards. I will provide some detailed information on floating a business soon.
Closing the business
If you are simply closing the business, the process should be much simpler. You should contact the relevant authorities to advise them you are closing down and calculate and pay off any outstanding liabilities (such as VAT) and debts.
If you have employed any workers you will also need to give them the proper notice and any outstanding pay and benefits. Employment laws differ in every country need careful planning.
