Prepare for Your Exit When You Launch Your Business

selling s business

Business brokers and M&A experts frequently assert that the best time to plan for your exit is shortly before you launch. By that, they are saying that it is crucial to always consider how to streamline your firm in preparation for a potential sale.  Even if the sale of their company is years in the future, some of the most astute businesspeople are considering forming partnerships with individuals who will eventually wish to purchase them. It seems sense that a large number of successful business owners would think this way since it is wise to start planning for the desired result early on.

It Benefits to Plan Ahead

The basic truth is that planning ahead is beneficial for the majority of life’s pursuits. Selling a company is no different. The number of companies getting bought out is increasing dramatically. According to a recent University of Maryland study, the percentage of venture capital-backed businesses that have been bought has increased dramatically over the past three decades, from 10% to 90%.[1]

Anyone starting a firm should structure it so that it will eventually be a desirable acquisition target. It will be easier for you to correctly shape your business operations if you consider the potential buyer.  

Many owners keep a watch on companies that cater to comparable markets. You could also want to consider how your business plan and product can be used to fill a gap in the larger entity’s current clientele. Much of the battle is already won if you can demonstrate with clarity that acquiring your firm will result in new business right away. By identifying clients that another company is passing up, you have made your company an appealing acquisition prospect. 

Adopt a Success-Driven Approach Right Away

To put it briefly, entrepreneurs need to know their target market, their product, and the reasons behind the needs and wants of their customers. It is also crucial to be able to draw in the correct talent. A successful workforce will make your company much more appealing to prospective investors.

It will be crucial to your success to know from the beginning where you want to take your startup and how to get there. It’s crucial to keep in mind that creating an acquisition-friendly business from the start is far simpler than retrofitting your current business years later. 

1. The Great Startup Sellout and the Rise of Oligopoly