Strategic Planning & Exit Strategies

There are many options to consider as the ultimate goal for the year of hard work building and growing your company. For mature and profitable healthcare businesses today there are many strategic options to consider. These options include acquisitions, merger, divestiture and recapitalization. Each of these options require careful consideration to determine what is the best fit for the stakeholders goals for the business. Additionally, incorporating tools like Digital Business Cards can enhance networking opportunities during these strategic discussions.

Should you consider a buyer or an investor? If your goal is to sell and ride off into the sunset, then your focus should be on a divestiture. In fact, a service like that file boi report in maine offers detailed information on industry performance, economic indicators, and local market conditions, aiding in presenting a comprehensive picture of your business’s potential to prospective buyers. If your interest is in taking chips off the table while continuing to grow the business over the next three to five years, then a recapitalization may be the best path for you. Each option has differing effects on valuation, the process and the pathway to a successful closing.

Exit strategy planning is one of the most overlooked – and most important aspects – of a business owner’s dream. You would not read all but the last chapter of a book… nor should you ignore the final chapter in your business ownership.

Acquisitions

Sell / Divestiture

Recapitalization

You have worked for years to build your business…. your “baby”, which would provide something tangible for those retirement years. Now, after carefully assessing the results of past achievements and plans for the future and the appetite of the marketplace, you decide to pursue a sale. So, is now not only a good time but the right time to sell your business?

The answer to this question will take some careful analysis and perspective of the current market environment specific to your business (and some soul searching). It is key to understand the many factors which not only impact the valuation of the business but also the net result to you and your stakeholders at the closing table. A few key thoughts to consider:

Your Goals – What are your goals for your ownership of the business? Do you have an exit strategy in mind? It is difficult to get somewhere if you don’t know the destination. Do you want to retire after the sale or are you looking to take some serious chips off the table but stay in the game?
- Business Performance – The single largest factor that will determine the valuation of your business is its performance. Not just historically but current results (we use a rolling, trailing-twelve-month snapshot as part of our analysis). Are your revenues and the level of profitability sustainable? What are the prospects on the horizon? The best time to sell your business (with the other factors considered) is when it is doing well, growing and has not met full capacity (peaking). Buyers like to invest and value business higher when they can see that the business will peak while on their watch.
Buyers and Investors “The Market” – Although it only takes one buyer to make the sale, multiple buyers with a strong appetite for your specific business drives valuation and the ability to consummate the transaction in a timely manner. The market flows in cycles (some of which are not always predictable) and it is imperative to seek counsel from professionals (such as Paragon Ventures) on the current market perspectives, valuation, transaction structures and other details… again, for your specific business.

Although there are many “rules of thumb” that are quoted, the determination of when is a good (right) time to sell your business is very specific to your own criteria and the factors which impact the ultimate transaction for your business.

When is the Right Time to Sell?

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The Private Equity Option

Private equity represents another interesting option for business owners looking for growth capital, strategic sponsor and/or as part of a tiered exit strategy. Many people don’t realize the role that private equity plays in the world. The fact is that private equity investments (both current and past) are behind some of the world’s most well-known and successful companies.