I Am Looking To Plan Ahead

Planning ahead could mean a planned exit in anything from two years to ten years or more. It's not a forced sale; it's a PLANNED exit process to allow the business to reach maturity and allow you to continue on your "life's journey".

In our opinion, in case you asked, EVERY business should be started with the END in mind. 

That "end goal," of course, may not be a sale; it could be simply removing you from the day-to-day running of the business or a succession plan for your family. Whatever your planned exit is, Junction Twenty will guide you towards it.

The Junction Twenty programme is a twelve to eighteen-month programme that covers every element of business improvement, profit enhancement, vision building, and desirability in the marketplace. Upon completion of the programme, you'll have a clear LONG TERM plan to prepare your business and YOURSELF for your ideal exit.

Here are some top considerations to keep in mind. Our team will guide you through each step.

Beware of Tomorrow: We call this the "Tomorrow Gap" and it's when businesses preparing for a longer term exit THINK they have all the time in the world.  That's rarely the case.  Time flies, that's the bad news.  The good news, in this instance, YOU are the pilot. Many of the improvements and enhancements can take several YEARS to filter down to your bottom line.  When you have the time, use it wisely.  The best time to start was yesterday, don't wait until tomorrow, let's start TODAY.

While the points shown for "Selling Quickly" and "Selling Soon" are still valid, when "Looking To Plan Ahead" a bespoke programme is created.

In the early years of a longer term, planned exit, the focus will be on improvements to the business.  The following will be applicable as you near your exit date, typically one to two years before.  This is why your Exit Timeline is such a valuable document.

Negotiation: Be prepared to negotiate with potential buyers. Be open to compromise while also ensuring that your bottom line is met.  Prior to this we advise you to set your "lowest acceptable figure" so that the emotion of selling your business does not compromise your decision making process.

Due Diligence: Be transparent and provide necessary documentation for due diligence. This can help build trust and expedite the process.  Junction Twenty has a separate module and checklist for the Due Diligence process.  With a longer term, planned exit many of the "traps" of Due Diligence are covered and minimised.

Deal Structure: Consider various deal structures, such as asset sales or stock sales, and their tax implications. The right structure can impact the speed of the transaction.  Explore all these options early using professional advisors.  Avoid advice from well meaning friends and associates, even those who HAVE been through the process.  Taxation laws change like the weather and you want to make sure you're getting the RIGHT advice.

Legal and Financial Advisors: Enlist the help of experienced professionals, such as solicitors, accountants, HR consultants, wealth planners and financial advisors to guide you through legal and financial aspects of the sale.  Your accountant will almost certainly be required during the Due Diligence process.  We have approved partners we can refer to you.

Timing: When planning a longer term exit strategy the first area we start with is creating your "Exit Time Line".   This is a detailed planner illustrating the stages you'll go through on your exit journey.  As you'll see, even with five to ten year exit timelines, there's a LOT to do.

Your Timeline would typically include:-

1) The Decision

2) The time planned for Junction Twenty (12-18 Months)

3) The Improvement Plan (2-5 years)

4) The Evaluation(s)

5) Preparing for exit

6) Engaging a broker

7) Marketing the sale (3-12 months)

8) The Due Diligence Process (3-12 months)

9) The legals and fomalities

10) The handover (Transition) and exit (3-12 months)

These are all important factors to put into your Exit Timeline.  From marketing to walking out the door for the last time could take a few months, or a few years.

Contingency Planning: Prepare for unexpected obstacles that might arise during the sale process. Having contingency plans in place can help you navigate potential challenges without causing unnecessary frustration and anxiety.  Our team guide you to prepare for THREE scenarios when planning an exit.  These are; i) Slight Delay (few weeks) - how does this impact your plans moving forward?  ii) Moderate Delay (4-8 weeks), how does this impact your future plans, especially if this was a forced sale?  iii) Significant Delay (3 months +), how could this impact your lifestyle choices and is the deal at risk of not proceeding?

Transition Plan: Develop a clear plan for transitioning the business to the new owner, including training, support, and any necessary handover of responsibilities. A smooth transition can build buyer confidence and help facilitate a quicker sale.  Our team will guide you here as it's important to manage the expectations of both buyer and seller early on and agree a "Handover Time Line" that suits both parties.

Documentation: Ensure that all legal contracts, agreements, and transfer of ownership documents are accurately prepared and ready for signature. This can prevent delays in finalising the deal.  We always suggest setting up a "Data Room" for all Due Diligence Documentation, that ensures documents are uploaded securely with no delays.

Communication: Maintain open and transparent communication with potential buyers. Address their questions and concerns promptly to keep the process moving smoothly.  Ensure regular progress meetings are held to avoid the "we're waiting on them" scenarios.  The Junction Twenty team can assist here and provide an additional service for communication if needed.  This provides a "third party objective view" which can be very beneficial.

Flexibility: Be willing to adapt and adjust your approach as the sale progresses. Flexibility can help overcome potential roadblocks and facilitate a quicker sale.  Selling a business is a highly emotional process, however such high emotions can quickly lead to frustration and a break down in co-operation between the two parties.

As you'll find as you progress your business sale journey, COMMUNICATION is the number one key factor to a smoother transaction... and lower blood pressure.

The "Junction Twenty" Infographic is shown below and illustrates the exercises for each of the three modules of Profitability, Credibility, Scalability.