Why have an exit strategy?

As an owner manger, if you are thinking of selling your business it is essential to give some thought to your exit strategy and how you plan the get the most from your business when you come to sell it. This planning and preparation work can take a number of years – this is the best way to ensure that the business sells for the maximum amount. You only sell a business once.

BUT…. even if you have no immediate desire to sell your business, then thinking through an exit strategy is a great idea. Having an exit strategy in a sense forces business owners to stand back from their business and take a long hard look from the view point of a potential buyer. Too often, most entrepreneurs spend all of their time with the normal day to day fire fighting, but just occasionally they need to step back and see the bigger picture. The sort of questions they should ask themselves are:

Is all of the businesses value actually in the owners own head? Could the business function without the owner’s constant intervention?
Are they building long term, sustainable value into their business…. is there value in the company brand?
Do customers return to them again and again? – recurring revenues are highly valued
Are there enough processes to show that the business is well managed?

All of these are key questions when a business sale is imminent, but are also very relevant when a sale may be some way off. Owner managers have no problems working “in” the business, but they also need time to work “on” the business – in order to build it’s value.

Having a thought exit strategy also guards against the unexpected. If the owner is ill (or worse!) and unable to continue in the business, then how will the business survive? Or, what happens if someone comes in, completely unsolicited, and offers to buy the business?

So, to answer the opening question…. every business needs an exit strategy!

Video – “Good Governance” – Why Good Governance is Important for Small Businesses

 

Good governance is not just for big corporations – it is just as important for small businesses as well.

Governance is about having in place a set of procedures and structures to ensure the decision-making processes of the company delivers the shareholders objectives, recognises and seeks to mitigate reasonable risks, and ensures the business complies with all current, applicable legislation.  Bob Brown explains more.

To find out more call 01491 829 181 or contact us via the form below.

Case Study – Tripled Turnover with Organic Growth

CMC starting working with a marketing communication agency three years ago and has helped triple turnover from £1m to £3m by guiding them through organic growth. The company’s ultimate objective for growth was to ensure their businesses sustainability over time is assured, helping to support their family and lifestyle with less dependence on the two owners.

During the initial meetings we took the time to get to know our new client and help understand their goals and ambitions, personally and for the business. After our evaluation it was clear that the company were ready for the growth phase and we guided them through 5 key areas:

Strategy

  • Organic growth through increasing sales with existing clients (top 10 and rising stars) with their existing strong service specific in specific industry sectors.
  • Structure Change – a second tier management structure was needed to take full responsibility for elements of the business. This took the pressure off the two owners and allowed them to focus on strategic direction and leadership of the company.
  • Premises – Essential refurbishment of existing premises and purchase of new IT systems.
  • Management model developed with the use of profit centres to assign clear accountability.
  • Implemented performance measures and budgets, indicators and sales forecasts and targets.
  • Suitable exisiting financial controller and one of the owners took this role as finance director.
  • Ensured bank loan facility should it be needed to support second stage of growth.

Sales and Marketing

  • A focused client development strategy was needed to develop their 10 top clients, helping to increase profits. This would include employing account directors and managers to develop the client’s relationships and help increase revenue and profits.
  • Sales targets were installed to help measure, monitor, mentor and reward the account directors and mangers.
  • Marketing strategy and plans were developed with the part time marketing manager including positioning, messaging and communication.
  • A new website was developed to support new digital marketing, introduction of quarterly e newsletter, PR, advertising, case studies, sales collaterals and database cleansing.

People

  • Identified key people in company, and evaluated staffs strengths and weaknesses.
  • Increased workforce from 10 staff to 30 staff to support the growth and bring in updated practices and innovative ideas. New positions included account directors , account managers, account executives, designers and digital designers.
  • Training – Identified training requirements for key staff. This included the two directors developing their delegation skills.
  • Development – Appraisal systems put into place to maintain staff satisfaction with key performance indicators.
  • Recruitment – Presented ideas for job description roles and competencies.
  • Culture Change – To support growth a change culture from creative delivery to commercial sales was created.
  • Share options offered to selected employees.
  • Introduced to one of CMC Professional Partners – Access2 HR are experts in managing people, employment law and employment tribunals. They worked alongside CMC on recruitment, training, staff handbook, health and safety to help develop and look after the team.

Processes

  • New processes were implemented to support the new sales culture such as monthly sales meetings highlighting future business by value.
  • Timesheets were introduced to identify efficiency improvements.

Over these three years our CMC partner has formed close relationships with the owners and the team. Continuous advice and mentoring through regular monthly meetings and ongoing telephone support has helped the company remain focussed on the ultimate objectives and enabled them to flourish. This company is still a client of CMC’s with a very healthy future in front of them.

Contact us on 01491829181 to arrange a free and confidential discussion.

Case Study – Chiltern Cam

Dramatic Turnaround in the fortunes of a Specialist Manufacturer

CMC created a practical implementation plan to rescue this manufacturer company and steer it towards a profitable business.

The Challenge:

  • Falling revenues and margins
  • Unfocused sales
  • Mounting debts including the HMRC
  • Lack of full involvement

The Benefits:

  • Monthly sales almost doubled in 18 months
  • Created a sustainable order book with repeat business
  • Paid off the six figure HMRC debt in less than 2 years

Whatever the problems I faced, with CMC Partners, Practical help and guidance are never more than a phone call away. Patrick Knopp – Managing Director, Chiltern Cam & Engineering Solutions Limited

Download the full story….

Upcoming Events

Here is a list of events CMC Partners will be attending which offer support, advice and networking opportunities to businesses. Whether you are starting up a business, looking to source finance, experiencing challenges or wanting to exit from your business, these events can help support and guide you through your business journey.


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