Characteristics:

Through a serious analysis of the Company, the market and the opportunities available to reinvest into the Company along with the pros and cons of continuing to manage the Company, you have decided that the best route for the Company is to exit the market and sell the Company.  Your wave is ready to hit shore, and you want to leave the ride as simply as possible while retaining as much value as you can.

Major Emphasis:

Several things are important during the exit phase of the wave.  First, don’t lose sight of the operations.  The value of the Company is based on its ability to continue to operate fiscally sound.  Ensure that operations continue moving forward while you contemplate your exit strategy.  Second, understand the true value points of your Company and obtain a comprehensive valuation.  Third, create a selling strategy that includes optimization of your return on the investment you have made, serious tax planning and realization of other factors that may play an important role in your decision making such as continued operations, satisfaction of key customers, employee issues, etc.

Items to Consider:

During the Exit phase of the Company, the following questions are some of the essential issues which must be resolved in order to optimize your return on the investment you have made in growing and nuturing the Company:

Product/Service Considerations – Keep your eye on the ball.  How can we continue to be profitable?  How can we keep our customers happy?  Do we need to review inventories and other product factors and provide sales incentives in order to have a more saleable business?

Market Considerations – The value of a business being sold is often directly related to the future value of its current operations.  Are there market niches we should be entering into that we have previously thought unprofitable which will help bolster sales and future antipated profits?  Are our key customers happy?  How can we have a push to show sales growth?

Operational Considerations – How many skeletons are sitting in the back of our inventory closet?  Is there inventory which is obsolete that can be sold on a fire sale?  It is better to sell off old inventory for something than to leave it on the books and watch the valuation of the Company decrease due to slow inventory turns and significant obsolescence.  Now is the time to get the manufacturing and inventory house in order.

Financing Considerations – Valuation and tax consequences of a sale.  These are two things which must be on management’s mind as they determine how best to sell the business.  Is there a buyer in the Company’s current market?  What part of the business is the most valuable?  How do we structure an offering in order to obtain the best buyers that will provide us with the most value?  How must the sale be structured in order to conserve wealth and pay a minimal amount of taxes?

Business Plan – The business plan may change directions at this point in the business wave.  Now is the time to emphasize those items which are the most desirable for potential buyers.  This may mean that the sales channel, the brand awareness, the manufacturing processes or the customer list is emphasized more so in the business plan than it has been previously.  Once a sales strategy is completed, the business plan should reflect the most valuable portions of that plan.

How We Can Help:

Now that you have decided to sell your Company, without losing sight of the current operations, a major endeavor must be undertaken to obtain a proper valuation of the Company based on its most valuable resources, determine who the potential purchasers are, and structure a deal which provides you as the seller the return you seek as well as any other requirements you might have.  CXO Vantage can help as you go through this entire process.  To set up a free introductory visit with CXO Vantage to discuss your current situation and how we can help guide you as you Exit your business, call (801) 930-0842 or email us at info@cxovantage.com