At Uscita, we’ve recently collaborated on an article with Rock.partners looking at the equation between strong business foundations and the ability to exit strong later on. It all started with that common business trope “the best time to start planning your business exit is the day you start your business”. We work at one end of that, and Rock.partners work at the other, but that doesn’t mean we lack common purpose.
Some insist that focusing on exit strategy can take the heart and soul out of a company, advising owners to simply “build what they love” and everything will fall into place.
Rock’s founder, Rachel Vigers believes that
“building a business you want to exit from at some point in the future is not mutually exclusive from building a business that you love, & that others love too, right now”
Building a business with the future in mind—particularly when it comes to exit strategy—is essential, and it doesn’t need to compromise your passion or your values.
A Change Will Come
No matter how much you adore your business, times change. Markets shift, and personal circumstances evolve. Your business may well outgrow you, and if you’re serious about leaving a legacy, it’s crucial to consider what it will look like without you at the helm.
Planning for your exit doesn’t mean you’re selling your soul; it means you’re building a business that can thrive in your absence. And to do that, you need to be intentional from the start.
What Makes a Strong Exit?
A strong exit isn’t just about getting the best price. It’s about achieving what you’ve planned for. The work you put into your business in the years leading up to your exit is what will determine the quality of your deal. Think of it like an athlete crossing the finish line—their race time reflects years of preparation that went before, not only the one race.
Whether you’re aiming for an open market sale or a management buyout (MBO), the foundations you build today will shape your future exit.
Rock’s Foundation Pillars of Success
One of the key lessons Rock share with clients is the importance of having solid business foundations. Direction, Connection, Impact, and Value.
Each of these pillars plays a pivotal role in not only shaping your business’s ongoing success but also supporting a strong exit.
- Direction: Knowing where your business is headed is essential. Having clear ambitions can help you shape your exit strategy early on, which in turn informs the other foundational pillars.
- Connection: The emotional connection between your business and its customers or staff is invaluable. A connected, loyal management team can be a huge asset in an MBO, and loyal customers make your business more attractive to external buyers.
- Impact: The influence your business has on the market plays a huge role in exit planning. If your company is seen as a market leader, competitors may even approach you to buy you out. But beware—impact alone won’t close the deal. Your business will be scrutinised, and if there are cracks in your other foundations, the deal may not happen.
- Value: Finally, the ability to demonstrate your company’s differentiated value can significantly increase buyer interest. A business that can prove its competitive advantage is much more likely to command a higher price and attract quality buyers.
Exiting Strong
What we confirmed is that all 4 foundation pillars will support a stronger business exit in time. Foundation pillars and exit strategy fit hand in hand, working to the same end points of business success.
Time is Your Best Friend
We frequently see business owners who leave exit planning too late. Changes you make today need time to take effect, and it’s essential to be able to show a consistent pattern of improvement over several years, especially in your financials.
And it’s never too late to look at the foundations of your business. They can be underpinned to make them stronger and Rock.partners can help you identify where weakness may lie.
By focusing on these pillars and following these steps, you can increase the value of your business and ensure a smoother, more successful exit.
https://www.rock.partners/post/exit-planning-start-now-to-exit-strong
You can also contact Rachel Vigers at Rock.partners on
Rachel@rock.partners
