People whom are lucky enough to survive a fire tend to be those positioned near an emergency exit, having clocked the evacuation route ahead of time, and are sufficiently alert and agile to jump to action when the time comes. In short, survival is all about being in the right place at the right time, being prepared for the worse, and being ready to act quickly should the need arise.
Now let’s look at how you run your business and position it for a trade sale or public listing. The exit, after all, is your nod to personal survival in the hectic and stressful world of business; in which you cash in at least some of your chips and possibly lie down afterwards completely exhausted in the recovery position.
Firstly, as the entrepreneur, you need to be continually preparing your business for the exit; it needs to be positioned ready for the opportunity. When the alarm goes off indicating the proximity of a circling acquiring party, you need to have everything organised so that due diligence is swift and there are no skeletons in the closet. Everything and everyone has to be accounted for, and in doing so, the value of your business will be higher and your exit sharper.
Secondly, you need to be on your toes to spot the opportunity. Potential acquirers may look more like customers or collaboration partners. The optimum timing for a stock market listing may be fleeting and pass you by whilst you are busy fighting small fires within your organisation. If you have already considered possible routes to exit and done your homework on potential suitors or bourses, you will be tuned in and ready to break cover when the situation arises.
And finally, small businesses tend to be agile to the point of fidgety; chasing their tails and unable to focus. But in this heightened state of anxiety, you are already constantly adapting and seeking new customers meaning that you are also ready to leap to the exit. If needed, the adrenaline on which you and your team are already running can be funnelled into racing to the door; negotiating terms, providing data, speed-reading contracts, and being primed to sign the deal.
All good; but in a real emergency those that remain calm also tend to survive. Blind panic can prevent you seeing the risks and obstacles, and could result in you making a life-threatening decision. You may forget to use the fire extinguisher, you may step on glass, or worse still you might leave your friend behind and regret rescuing them for the rest of your life.
So too in business. The exit is marked in gleaming green, puncturing through the smoke and flames. But if you remain calm and walk steadfastly towards it surveying the land around you, you will make fewer mistakes and have fewer regrets. You’ll be able to secure a better future for your team bringing colleagues along with you, you’ll be able to get a better price for the company, you’ll be able to spend less time personally locked into the business afterwards, you’ll avoid tax pitfalls on the way out, and you’ll look back from the outside with not just relief but happiness that the job was well done.
And remember, don’t go back in until you are told it is safe to do so!
Start to Exit is due to be published in 2017.