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Posted by on in Global Business Group Blog

As you go through the day-to-day processes of managing your business, looking for a way out may be the furthest thought from your mind. Every entrepreneur worthy of the name is driven by a passion to succeed, and by a desire to take responsibility for their own future. When you succeed or fail by the strength of your own hard work, it can be a difficult decision to relinquish your tight grip of the reigns, and bow out of any enterprise.

But an intelligent exit plan is something which should be ingrained in both the business model and your individual career path if you truly aim to be prepared for every eventuality. An exit strategy can cover anything from the most destructive asset-stripping of a company, to a smooth transition to new ownership. Either way, it is something that should be in place from the earliest stages of your business.

So what do we mean by an exit strategy? From the most opportunistic cash-out, to a micromanaged change-over, the exit of one owner and the entrance of another will be a period of great change and potential instability for a company of any size. Your exit strategy will play a key role in deciding the future success of the enterprise you have built. So, what are your options, and best practices?

Planning Ahead

You already know to always plan ahead in business, and finding an exit route is no different.
Evaluating your business is the first step to handing over the reins of your enterprise. Understanding its core strengths and areas of improvement is vital to knowing your business’s true value, both in the present market and in its potential for future development, as well as its brand strength and product range. 

Selling

Selling up means that you relinquish complete control and contact with your enterprise. This can be a tough decision in itself, but may be ideal for an individual looking to retire, or start up a new project.

Every smart business leader knows not to simply settle for the first offer to match the asking price. Generate maximum interest both within the market and from external buyers. A bidding war will always make for a profitable exit strategy.

Executing the Transition

Do not change course. The business plan which you had in place before you made your decision to sell was the one which you had devised for stability and growth, so stick to it and do not change course. If you begin to make drastic changes to the business plan that is already in place, you may lose the confidence of colleagues and potential buyers, who may suspect that the alterations are being made to maximise the earnings you personally receive at your exit. 

Moreover, when a business changes hands, it requires stability and certainty. Remaining steady and on course will allow new management to remain confident of your business's trajectory, and will alleviate any doubts that colleagues and employees may have during the transition period.

A successful exit strategy is as crucial to have in place as any other part of your operational model. If possible, you should begin to plan your exit two or three years before the event, so that you are able to remain flexible to short term changes in the market and the company. Weigh up the pros and cons of every offer that you receive, and market your enterprise to accentuate its achievements.

Stay honest and true to your work ethic as an entrepreneur, and you should ensure that your business retains its status and market share long after your successful departure.

This article was contributed by BusinessesForSale.com, the market-leading directory of business opportunities from online media group Dynamis.

Posted by on in Global Business Group Blog

Negotiations over the sale of a business will often start positively, before ending in disappointment for both sides. An honest, open approach at the outset will help to create the right environment for a deal to be completed successfully.

Maintaining trust

One of the most significant factors that most failed negotiations have in common is a breakdown in trust. If you're looking to sell your business, then it's critical that you should offer an objective appraisal of the current situation.

That's not always something that comes naturally to a vendor. There may be a temptation to quote positive figures, in order to establish a higher selling price. The problem is that the due diligence process will always mean that the truth will be revealed in the end. If a prospective buyer believes that you are attempting to hide some important facts, or that you are not willing to be honest, they may well walk away from the deal.

What this means is that it's absolutely critical that you should offer detailed information too. By not providing some information, you may create the impression that you are being dishonest. That may not actually be the case, but impressions are incredibly important in such situations.

Most prospective buyers will be interested in knowing about the challenges that you face too. They'll want to understand the risks that are associated with the potential investment and will feel more comfortable knowing that they have a complete understanding of the business.

With that in mind, you should be prepared to talk openly about areas of the business that aren't going too well. By offering that information freely, you help to build the required level of trust.

Try to be consistent

Another reason why many deals collapse is because the vendor or buyer attempts to re-negotiate, once positions have already been agreed. If you have a particular price in mind, then make that clear at an early stage. By looking to re-negotiate at a later stage, you will undoubtedly put the entire deal in jeopardy.

The more changes that you attempt to make to an initial agreement, the more chance there is of the whole deal falling apart. Think carefully about your aims and objectives at the very outset of the process. That way, you won’t present a negotiating stance that appears to be inconsistent.

Conclude deals quickly

When negotiations drag on for a period of time, it becomes more and more likely that a deal will eventually collapse. That doesn't mean that you should rush into decisions, since you'll clearly want to be sure that the deal is right for you.

What this does mean, however, is that you should certainly look to respond to requests quickly and accurately. By doing so, you make it clear that you are serious about the transaction and that you are committed to completing the deal.

If you take your time and appear to be hesitant, then it's natural that the other party will start to question your motivation. They may wonder whether you are really prepared to complete the transaction. This can lead to a loss of trust and has the potential to cause the other party to look to complete the deal elsewhere.

Be respectful

You are looking to get the very best deal, but that doesn't mean that you need to see the transaction as being personal. By maintaining a professional stance throughout, you'll find that others react more positively to your requests and ideas.

If you allow yourself to create a hostile situation, then you simply increase the chances of the deal falling through.

 

 

This article was contributed by BusinessesForSale.com, the market-leading directory of business opportunities from Dynamis, the online media group also behind FranchiseSales.com and PropertySales.com

Posted by on in Global Business Group Blog

b2ap3_thumbnail_Investors.gifRegardless whether you're starting a business or already have an established company, there's a good chance that at some point you will be looking for money, either debt or equity, or combination of both. This article should help to properly prepare the materials presented to investors, thus increasing chances of successful funding.

Investors have money, but they don't have much time to sit and read through 27-pages business plan. If your initial presentation is more than 2-3 pages long, most likely it will end up in a waste basket. Under best circumstances you will receive a call from investor asking to briefly explain what do you actually want. Therefore, lengthy business plan is just as effective as a business card with contact information. It doesn't mean that eventually you won't need a comprehensive document, but not for the initial introduction.

Posted by on in Global Business Group Blog

Most people are familiar with JOBS Act in connection with crowdfunding. However this document also has sections related to other topics, particularly "Access To Capital For Jobs Creators". Not being a securities lawyer it's hard for me to fully understand the upcoming changes. My feeling is that it should ease securities broker-dealer requirements for being able to perform small services related to connecting investors with investment opportunities.

What is your interpretation of this portion of JOBS Act (H.R. 3606)? My feeling is that it will allow in some cases to offer intermediary services to investors without current requirement of being registered as securities broker-dealer. Here is the excerpt.

‘‘(b)(1) With respect to securities offered and sold in compliance
with Rule 506 of Regulation D under this Act, no person who
meets the conditions set forth in paragraph (2) shall be subject
to registration as a broker or dealer pursuant to section 15(a)(1)
of this title, solely because—

Posted by on in Global Business Group Blog

crowdfundingBesides obvious benefits of offering alternative source of financing to small businesses, crowdfunding has one side benefit that may be just as important as funding itself. I am talking about organization and accountability of a business that decided to take crowdfunding route. 

Lets compare two similar start-ups: ABC company is funded exclusively by the owner and XYZ company funded through crowdfunding. We are talking about very small companies, with start-up capital of under $100,000. About 85% of all business start-ups fall under this category.

 

ABC owner is a classic entrepreneur type, doesn't have a clear vision where she is going, or business plan, or financial projections, or sales and marketing strategy. She basically has nothing but enthusiasm and entrepreneurial spirit. Such startups are the main reason for 60-75% of small businesses to fail within first five years. Moreover, ABC owner is not reporting to anyone and in many instances doesn't ask for advice or hire a professional consultant to help with business organization.