MExit (Maximizing the Value of your Exit)

If you haven’t prepared your company for a sale, there is a high probability that you
won’t be successful in selling

The hard reality is that if you are planning to sell your business within the next 5 years, and you haven’t started the process, you are already behind. There will be many businesses across western Canada being sold, but only the ones that have started the necessary preparation will be sold successfully, at the price they want. With only 10% of businesses being sold successfully, you only have one chance to get it right.

Preparing Your Business for a Sale

Cashing out doesn’t just happen! It is the result of preparing the business for a sale, a process which takes both time and understanding, not only of what needs to be done, but how to do it effectively. Only those business owners who have created a resilient and sustainable business, will be successful in selling it.

Many business owners haven’t made the connection that when it comes to their businesses, there will be a transition plan – the question becomes is whether that plan is one that they crafted, or one that someone else does: their spouse, family, the government or their executors, will execute.

Here is some perspective around what can be expected based on Canadian research:

  • 60% of small and medium sized privately owned companies in Canada have owner aged between 50 and 64 years (estimated at around 660,000 businesses in total),
  • There are over 65,000 small business in Alberta that have between 4 and 50 employees,
  • 53% of Alberta company owners plan to sell their businesses within the next 5-7 years,
  • Typically, 85-90% of a business owner’s wealth is tied up in their business,
  • Most business do not get put up for sale: owners opt to just shutter or wind down for pennies on the dollar because they don’t know what to do, or how to do it,
  • 80% of businesses don’t sell, Of the 20% that do the average sale price is typically ½ of what the owner thought it was worth,
  • 10% of businesses cash out as planned.

Selling a business is a process, not an event. MExit™ is a proprietary framework that provides an effective way for business owners to prepare their businesses for a maximum value exit – the one that ensures they pocket the most from their sale.

Feel free to contact us to discuss how we can help you prepare your business for a successful transition.

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How can ProACTv help?

Using our structured framework, we can help to prepare your business for a profitable sale. Our planning process focuses on three main steps:

Maximize Wealth

Making sure your business is as valuable as possible to attract a suitable buyer through a clearly defined review of your business and the creation and execution of a plan to achieve this that is specific to your business.

Transact Wealth

Optimizing your options so that taxes and other costs are minimized ensuring that the sale happens effectively, efficiently and in accordance with your wishes.

Transition Wealth

Make sure your business is handed over in the best possible shape it can be to the new owner(s) so that the new owners can continue business with the least interruptions, ensuring you get the full price you negotiated for its sale.

The Art of
Selling a Business

Within the Exit Right framework are the necessary steps and activities to be undertaken to ensure you get the most value out of your business, based on your desired needs and wants.

Many businesses have been focused on planning for growth, maintaining their businesses and not on preparing their business for sale, as it really is not top of mind. However, not making preparations for the eventual sale of your business as key part of your business strategy is negligent;

  • to you as the business owner;
  • to your partners; and
  • especially to your employees.

Planning for succession is as fundamental a part of running an enterprise as making payroll, catering to customers, or overseeing manufacturing.

Research has shown that the most success business exits (merger or acquisition) had the following common elements:

  • Company had restructured for change and growth
  • Company had increased market share
  • Company was in the process or had obtained or offered new products
  • Company had accessed new markets and/or
  • Company had some intellectual property that was desirable