This week we return to the airwaves with business exit guru Geoff Green. Geoff has thirty years’ experience helping business owners get rewarded when they exit, and has also authored the book “The Smart Business Exit”.
Geoff is a bit different to most consultants, in that he has also lived through his own business exit. As a founder of the Bendigo Stock Exchange, he helped build the company from nothing and successfully exited by way of trade sale to the National Stock Exchange. This experience gives him unique perspective on the business exit process, and provides powerful insight into the planning needed to achieve a successful business exit.
In this episode Geoff raises some uncomfortable truths which business owners must consider if they want to get an optimal result on exit.
When it comes to planning your exit strategy, these ‘truths’ are often the elephant in the room; they are the critical issues that business owners would rather ignore.
For example, it can be difficult to realise, much less admit, that your children don’t want to take over the family business, or that the business you have built from scratch is objectively worth only half of the valuation that is in your head. However, as Geoff points out, business owners need to face up to these uncomfortable truths and address them as early as possible, if they want to maximise their return.
So how do you create value in your business?
Business owners often build up their businesses in an ad hoc manner, relying on processes and structures which work for them at the time. But when they are looking to exit their business, owners need to look at what commercial value the business really has. To assist you in growing value in your business, Geoff discusses:
- Having growth drivers in your business – elements that a buyer can pick up and exploit to rapidly increase the value of the business.
- The business should not be dependent on its owner – you need to structure your business so that you are not fundamental to its success going forward.
- Think like a buyer – build and invest in your business as though you are building it for someone else.
If you are interested in checking out Geoff’s book head to his website at: www.smartbusinessexit.com. The site also houses Geoff’s regular blog and other useful resources such as the “Sellability Score”, a complimentary online questionnaire that helps you gauge the value of your business in less than fifteen minutes.
*Please note that Martin and Ed’s business exit strategies are general in nature and do not take into consideration any of your personal circumstances. Further, Martin and Ed are not financial planners or accounting experts. You must seek individually tailored advice to ensure you properly prepare for your business exit.