Divestments and Exit Strategies

Successful companies consistently reassess whether they should remain in certain lines of business as part of their ongoing strategic planning process.

At other times, business owners may choose to sell their business to satisfy their personal goals.

In either case, it is necessary to develop a divestment or exit strategy to maximize the return on the owner's time and capital when the business is sold.

Most owners fail to realize that this strategy takes a considerable period of time: three to five years in most cases; and a corresponding amount of work, in order to attract a good buyer who will be prepared to pay a premium for the business.

Most often, a business owner will go to a business broker who will normally charge 8-12% commission, plus expenses and the owner will still need legal representation. On a $1,000,000 transaction, the selling owner may net as little as $600,000 after fees, commissions and taxes are taken into consideration. In addition, most business sales tend to be to heavily leveraged private individuals or financial buyers, who typically are prepared to pay much less than a synergistic strategic buyer.

A better strategy is to do, in effect, a "For Sale By Owner" and look for a strategic buyer who will pay more for the business.

The Boleyn Advisory Group is able to coach you through this process. We can help you make the changes in your business that will boost its value and we will assist you with marketing your business to strategic buyers and negotiating the right deal that rewards you for your investment in the business.