3 Mistakes Entrepreneurs Make Setting Up Their Exit

1. Advisers.

Founders wait too long to assemble the best possible team of advisers. The founder will potentially add 20-30 percent to the value of the exit if they have a strong team of advisers at the earliest possible stage — an experienced and professional team of business intermediaries/brokers, legal, financial strategists and tax planners who can expertly structure the business to accomplish the seller’s goals, inclusive of lifestyle, philanthropy and legacy. The advisers will also be experienced in the industry and open crucial doors for fund raising, business development and strategic partnerships.

2. Managers.

Failing to recruit and secure a management team that possess the knowledge, accomplishment and sophistication required by a buyer post-acquisition. When someone is ready to buy your company, they are going to look at the quality/experience of the managers, as the retention of those people will be part of the deal. Having the right managers empowers the buyer to concentrate on the overall management of the company in the role of CEO, without having to also act as CFO and/or COO.

3. Systems.

Failing to install and provide IT systems to accommodate the growth sought by the new owner. If the company does not have the right business growth and management systems in place, the company will be less attractive.  As information technology has become an increasingly critical aspect of a modern companies’ operations, potential buyers have intensified their scrutiny of the seller’s IT systems. In a “roll up” scenario, the ease of a smooth integration of the IT system will be a key component of the transaction.

If you are are already playing the “big check exit” lottery, then check your advisers, managers and systems and increase your odds.