Business Leader Magazine: How do you prepare your business for exit?

When should you start thinking about your business exit? Some say don’t get distracted by this at all and focus on delivering value to your customers and shareholders and the rest will take care of itself. I say, your business exit should be one of the first things you consider. It’s true that as soon as you develop your plan/ roadmap to exit, it soon becomes obsolete. You develop your plans (especially your very early plans) in a bubble of theory. Once you begin to implement, that bubble is pricked by a ton of reality. However, if you don’t have a plan or roadmap to start with you’ll almost certainly end up somewhere you didn’t intend. Therefore, you need to think about what your ideal exit looks like and then figure out the steps to get you there.

But there are two significant watch-outs with this. Firstly, your plan needs to be realistic - there’s no point believing you are a Unicorn and you are going to change the world for ever. The likelihood it you’re not and you won’t. Secondly, be a disruptor and a challenger but don’t force the customer to make a huge leap. I love disruptors and challengers. When we set up New Covent Garden Soup Company we were disrupting the establishment (canned soup) and we were challenging the conventional wisdom. But we did it within the norms of the UK retail trade. We were offering the consumer something new and better than that which existed before. The quality, convenience and brand appeal of fresh soup was much better than the established canned soup sector. But we didn’t try to reinvent the wheel. We weren’t asking the customer to make a huge leap. They could still find the product in the grocery store – just a different part of it.

The pandemic and lockdown dramatically changed the way consumers shopped and interacted with products they considered buying. However, once lockdown restrictions were lifted, consumers reverted to what they knew and enjoyed best – physically shopping in stores. Almost as quickly as D2C and subscription business model solutions rose in popularity, they faded again from customers’ awareness. So, being revolutionary is good – just make sure the revolution doesn’t fizzle out and you’re the only one left on the barricades. You need to have strong target customer insight and ensure you are providing a real competitive advantage, one which resonates with the target group and which continues to do so over time.

After that, it actually is about a focus on delivering value to your customers and shareholders. But it pays to be aware of what delivers value to a suitor also. Take time to figure out (right from the get-go) what excites the business(es), which are most likely to buy you at exit. Set about making strategic decisions which will get you on their radar. And, it’s never too early to engage in some meaningful way with your preferred suitor(s). If you stake a claim (consumer or market or something else), make sure your target M&A buyer knows about it. Of course make sure you deliver against your claim, but make sure they are watching while you do it.

And don’t forget to get help with all of this. You’ll be busy enough running your business and dealing with all the challenges which are thrown at you, to do a perfect job on your own on positioning your job for exit from day one. You wouldn’t sell your house without engaging with an estate agent. Don’t try to sell your businesses (usually a much more valuable asset) without significant help from a corporate finance advisor (i.e. one who has discrete knowledge of your industry).