WHAT'S THE BEST WAY TO EXIT?

When considering business exits, the real opportunity lies in being acquired or merging with another company. This can take various forms, from private equity firms seeking financial investments to industry leaders looking for strategic partnerships. However, be prepared: negotiations can be lengthy, complicated, and often frustrating. Buyers will conduct extensive due diligence, and if they uncover anything concerning, they might either abandon the deal or significantly reduce their offer.
Focus on building a business that attracts a premium sale through a merger or acquisition to maximise your profits.

Watch Out for Earn-Outs
An "earn-out" is a strategy buyers use to mitigate their risk when purchasing your business. It's often proposed when you believe your company is worth more than what the buyer offers. In this scenario, you might agree to receive an initial payment along with a percentage of future earnings for a specified period after the acquisition.

For instance, you might receive $1 million upfront, plus 5% of gross sales over the next three years. Alternatively, the buyer could offer 50% upfront, with the remainder paid over a few years based on certain performance criteria.
I strongly advise against accepting an earn-out, as they seldom work in your favour. A lot can happen during the earn-out period—including the potential liquidation of the business—and you won't have control over those outcomes.
Instead, invest your efforts into creating a valuable business, allowing you to command the price you believe it deserves without having to compromise.

To learn how get in touch, we'll provide you with a detailed overview about how to maximise your return.