In your business how do you know if the decision you are making is taking you towards your ultimate goal as a shareholder? Unless you have established your exit strategy, how are you really sure your decisions match where you are wanting to go?
For instance lets use two different ways to exit as an example
(1) list on the stock exchange
(2) sell to a competitor.
Over and above the daily business decisions, when you take strategic decisions and what you should be focusing on – depending on which exit above you would probably make slightly different decisions.
if listing was the goal – there would be a much higher focus on governance and systems. Why, because you know that this is going to be something that needs to be in order before you list. If you don’t keep the focus on it when you are ready to exit it will take you longer, cost more and potentially even keep you from listing.
Now take selling to a competitor – while governance would be important in any business, there would be an emphasis of focus on making sure what you do makes you more attractive to them.
While of course your exit strategy isn’t unchangeable you need to have a direction in mind so that your decisions and focus areas can align with this.
When you start to think about your exit strategy, try to include the following indicators:
Is there a specific time frame that you have in mind? Do you need to sell by a specific date?
Is there a specific price you have in mind? Will you sell when you reach that price?
Are you looking for a complete exit? Do you want to sell your shares, exit from the company at the same time?
Do you have a specific buyer in mind?
Are there any deal breakers for you?
Happy ending exploring 🙂