“If somebody wants to maximize their exit, timing and dollar return, they want to start thinking like a strategic advisor and less like a COO or operator,” says DeDominic & Associates CEO and Chief Catalyst Patty DeDominic (WPO Santa Barbara). Patty is a business coach and advisor who not only has made her own advantageous exits, but has been instrumental in the growth and exits of some of the world’s biggest names.
Below, are Patty’s top four tips for shaving years off your exit:
- Plan Your Timing: Put on a strategist’s hat three years in advance and think about how to maximize your EBITDA and reduce your business’s vulnerabilities. Ask yourself:
- Do I have a concentration of accounts? Diversify where possible.
- Do I have a weak management team? If a buyer sees that only you and one or two other people are running the company, it is not as scalable, and if you lose one or two key people, you potentially lose the heart of the business.
- Do I have a limited product or service line? Again, diversity is key.
- How am I positioned in the market? Am I a manufacturer of products that were hot years ago, or ones that are going to be hot in 2020? If are you are in a declining industry, figure out how to move into an exciting growth industry.
2. Form Alliances: Most big deals happen with people who have been tracking you for a few years. Begin cultivating your strategic alliances now. Identify the top consolidators, competitors and prospective acquirers in your industry. Know who is looking to expand in your market.
3. Think Like Hockey Great Wayne Gretzky: Don’t follow the puck, look at the players and go where you’re sure the “puck” is going to be, aka, find out who your likely investors are and go where they’re going.
4. Get an M&A Attorney: Sophisticated buyers know how to write a mercenary contract giving them every advantage. It won’t cut years off your deal (but might save you years of frustration). Early on, engage the absolute, most experienced M&A attorney you can afford.